Bitcoin markets pulled back to start the week on Monday, showing the $8400 level as being too expensive. By doing so, it looks likely that we will continue to see a bit of a struggle just above. We have pulled back several hundred dollars, and it looks likely that we will continue to see the volatility.
Bitcoin found the $8400 level to be too expensive and pulled back rather significantly to open trading on Monday. Beyond that, we break down below the $8000 level, which of course is a large, round, psychologically significant number. It now looks as if we will probably go to the $7600 level, an area that was previous resistance. I suspect that this market will attract buyers on dips, and therefore value hunters will continue to be a part of this market. However, Bitcoin has been obliterated over the last several months, so confidence is something that is sorely lacking.
Bitcoin fell against the Japanese yen as well, as the ¥900,000 level offered a significant amount of resistance. Because of this, the market rolled over to the ¥850,000 level, an area that has a certain amount a short-term support built into it. If we break down below there, the market is likely to go looking towards the ¥800,000 level below, which was significant resistance in the past. I like the idea of buying dips in this market, but I recognize that you will need to be able to ride out the volatility, and this means keeping a small position. You can add to your position if the market moves in your favor, but until then I would be cautious about building up a larger position. I believe that the ¥700,000 level being broken to the downside would change everything and unwind this market yet again.