Is the Bitcoin market entering a downtrend? In oversold situations, how should one buy and sell?
Hello everyone, a huge crash! Wondering where Bitcoin is headed@xi10jun1.
Recently in the Bitcoin scene, there’s talk that a hard fork could cause a split.
I’m not very familiar with the internal mechanics of Bitcoin itself, so I won’t go into too much detail. Instead, let’s interpret the market’s reaction.
This Week's Performance (March 17, 2017 to March 23, 2017)
First, as usual, the performance. I’ll present the gains and losses first.
- Last week (through March 16, 2017) assets: 74,220 yen
- This week (through March 23, 2017) assets: 78,561 yen
- Change: +4,341 yen
Last time I had a negative result, but this week I managed to push to a new high!
After the sell-off on the 19th, there was quite a bit of gain, but since then I couldn’t extend much further... As the hard fork topic heats up, trading is becoming increasingly challenging.
Specifically how it is becoming difficult is covered in the next heading.
Does the hard fork accelerate selling?
It seems Bitcoin could split into BTC (the Bitcoin up to now) and BTU (Bitcoin Unlimited—the new Bitcoin after the split) due to a hard fork.
For details, please refer to the site of expert Tetsuya Oishi (Oishi Tetsuyuuki):How to Prepare for Bitcoin Hard Forks (User FAQ) | Bitcoin Institute)
Now, regarding the Bitcoin market in response to this, there has been a large drop, indicating a downward trend. The previously dominant uptrend driven by Chinese demand and ETF approval prospects has flipped into an unknown market.
Perhaps because of this, market participants seem to be fewer than before. Even at the order book, the number of orders is clearly decreasing.
There are times when a downtrend yields more
From here it becomes a discussion of trading, but in fact, such a downward trend can be easier to profit from.
The reason is that there is often a rebound after a sharp drop. Especially when a long-time candlestick (here, a Heikin-Ashi) protrudes outside the Bollinger Bands, resembling such a market.
I think I mentioned this in a previous column, didn’t I?
Here is the actual scene.
Around 7 a.m. on the 19th (I was in Tokyo from early morning). It was near the tip of a long leg on the 12-hour chart, where price was moving. When a long-time time frame protrudes outside the Bollinger Bands like this, one can profit by rebounding from being oversold.
By the way, this buying position was profitable.
However, a caution: when trading during overbought or oversold conditions, you need a strategy to exit the position.
This is explained in the paid section.
Free summary: Bitcoin is in an unstable market
I think the previous upward-only market has ended for now. With the hard fork issue in mind, it may transition into a downtrend.
Moreover, even if the BTC vs BTU issue is settled, it’s unclear whether prices will rise or fall. That is outside my area of specialization, so we’ll have to watch what happens next.
If possible, I’d like prices to go up, and until the situation stabilizes, it would be safer to focus on short-term trading to protect assets.
End corner 1: Shopping with Bitcoin!
In fact, on overseas e-commerce site “FANCY,” you can buy goods with Bitcoin! It’s a bit expensive to ship, but you’ll find stylish items not often seen in Japan!
I’ve summarized how to use FANCY on this blog, so please refer to it.
- →How to create an account, register, set up, and purchase on FANCY | Yutori Generation Investors Jun
- →How to buy (pay with Bitcoin) items on FANCY | Yutori Generation Investors Jun
End corner 2: How should Bitcoin futures trading (BTCFX) be taxed?
You must also report BTCFX earnings for tax purposes! I’ve written a blog post after confirming with the tax office by phone, so please refer to it.
Note that tax offices and tax accountants may have differing opinions. Also laws can change, so the method of filing may change. Before filing, be sure to check with your nearest tax office or a tax advisor.
Note that the free portion ends here. The rest is detailed analysis and future outlook, so this will be paid content. If you want to read more or you’d like to support with a tip, subscribing would be greatly appreciated. Thank you for your continued support!
