[Drop Expansion] Falls below 100,000 yen again! Is the Bitcoin market entering an even more challenging new stage?

Hello everyone, on this new stage! I was slow to notice that Bitcoin’s market conditions have changed@xi10jun1.

About a week has passed since last week’s sharp drop. China’s Bitcoin market has been in an uproar. During this period, the Chinese government reportedly began investigating domestic Bitcoin exchanges.

For those of you reading this column for a fee, you can be assured that these countermeasures are being properly addressed. Of course I’ve written many times about the risks of China and exchanges, so it’s natural, right?

This week’s performance (January 6, 2017 to January 12, 2017)

First as usual, here are the results. From this time onward, I’ll announce gains and losses first.

Last week (through January 5, 2017) assets: 59,482 yen
This week (through January 12, 2017) assets: 59,716 yen
Change: +234 yen

And the accompanying image is still made into a GIF. I planned to post all trades, but due to image quality and upload size limits (fx-on caps at 1M), this time I’ll only show the results. GIFs tend to be heavy….

As for assets, it briefly exceeded 60,000 yen, but during the middle of the period the Bitcoin market swayed and it dropped to 58,000 yen… However, from the latter half of the week, I gained a better understanding of what was happening and managed to recover.

Well, in this way, I’ll continue to increase free content so that you can enjoy it without paying, so please continue to support me!

Bitcoin market on January 7, 2017 (chart time: 1h)

Immediately after the crash, there was understandably strong buying.

But the subsequent rebound was weak. It wasn’t the usual “if it dips a little, buy now” atmosphere; if you let your guard down, selling pressure would surge all at once.

Perhaps participants are dwindling due to an unprecedented crash.

Bitcoin market on January 8, 2017 (chart time: 1h)

On the 8th, the decline temporarily settled, and then it gradually rose.

Up to this point I had been trading with 1 BTC positions. But even when approaching key levels from before the crash, prices did not move as readily, and I realized the order book had drastically thinned.

Before the crash, the order book often showed 10–100 BTC, sometimes 200 BTC, and up to 1,074 BTC at most. After the crash, numbers around 0.1–10 BTC appeared repeatedly, with occasional 50 BTC or 100 BTC orders. It was clear participants had decreased.

This disparity distorted trading and caused major losses. As the image shows, I started to question whether this slow rise was a genuine uptrend.

Bitcoin market on January 9, 2017 (chart time: 1h)

Having a vague sense that the market had changed, I only understood the reality after incurring losses on the 9th.

I fell into price collapses and caught in incomplete selling or buying.

It became difficult for range strategies like “buy when it drops” or “buy more if it breaks a line” to work.

Bitcoin market on January 10, 2017 (chart time: 1h)

On the 10th, direction grew even more unclear. I’m not good at this kind of market…

Overall it seemed to be an uptrend, but it’s hard to tell. It could move in either direction.

So I decided to take a little trading break and observe the market to decide what to do.

Bitcoin market on January 11, 2017 (chart time: 1h)

I saved the image incorrectly and the line disappeared. My apologies.

With no clear direction, Bitcoin continued to drift upward slowly.

At this point I was thinking it might rise, so I accumulated a buying position (1 BTC at 108,064 yen with a stop order at 108,100 yen) to watch the situation.

Bitcoin market on January 12, 2017 (chart time: 1h)

The 11th saw a sharp drop afterward, and I gained profits from short positions during this crash.

Moreover, it broke below 100,000 yen, and on the 12th it even fell beneath 90,000 yen... News related to China’s Bitcoin situation began appearing repeatedly from around the 11th, and selling pressure seemed to rise again.

A rebound is easy to aim for, but there is a high chance of further declines in subsequent updates. Should I trade short-term and observe…?

Free section wrap-up: Be mindful of China’s Bitcoin market!

Probably those who bought around 99,000 yen expecting a drop below 100,000 yen are now suffering further losses.

As I’ve written many times, when a crash occurs and market conditions change and China’s Bitcoin situation becomes unclear, careless positions will magnify losses.

If you must trade, perhaps go with the smallest position for the shortest trades, or target short-term reversals using Bollinger Bands; these seem prudent for now.

More than anything, preserving assets is the priority, so I want Bitcoin’s new stage not to ruin us.

And this month, let’s keep a close eye on China’s Bitcoin situation. Depending on developments, strong buying or strong selling may emerge, and BTCFX could profit from both sides. Let’s stay calm!

End Corner: Try shopping with Bitcoin!

In fact, on overseas e-commerce site “FANCY,” you can buy products using Bitcoin! There is a shipping cost, but the items are stylish and not commonly seen in Japan.

Instructions for using FANCY are summarized on this blog, so please refer to it.

→How to create an account at FANCY, register, set up, and the flow of product purchases | Yutori-sedai investor Jun
→How to purchase (settle) FANCY items with Bitcoin | Yutori-sedai investor Jun

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