BTC/USD

Bitcoin rallied slightly during the trading session on Tuesday, reaching towards the $7100 level. This was roughly a 2.5% gain, but after the selloff that we have seen, and of course the cluster above at the $7500 level, I think that we will eventually see sellers come back into push this market lower. The downtrend line is still very much intact, so I think that the $8000 level will be very resistive as well. Waiting for some type of exhaustive candle above might be the best way to play this market as we should continue to go looking towards the bottom again. Regardless of any positive news, it seems that bitcoin simply cannot pick up any momentum to the upside for a protracted move. At this point, I still believe in the downside although we will get the occasional pop.

BTC/JPY

Bitcoin also rallied against the Japanese yen, reaching towards the ¥790,000 level. We are starting to approach the cluster that I have marked on the chart, an area that I expect to see some selling come back into the marketplace. We also have the downtrend line very much intact, so that’s worth paying attention to as well. At this point, I think it is very much like the BTC/USD pair, we will simply sell off every time we rally. If we can break above the downtrend line I have marked on the chart, then we may make a serious move towards ¥1 million, but at this point I think there just isn’t enough momentum to make that happen. We would need some type of catalyst, something that I don’t see currently. I believe the market is probably going to go down to the ¥700,000 level below.