By the end of August, will rise significantly from the cover

Within Tokyo, due to the typhoon, the heat from the recent days feels like a lie and it is cool.

The transition between seasons always comes suddenly, doesn’t it?

In the foreign exchange market, speculative traders have returned from their summer holidays and are lively. With heightened alert around North Korea, USD/JPY has been choppy, but the dynamic market is more interesting, after all.

By the way, BTC has finally surpassed 500,000 yen. It is currently hovering around 520,000 yen.

■ Rapid buyback pulled the price up

This time, let’s look at the 4-hour chart.

This is the BTC/JPY chart as of September 1 (technical indicators: moving average 5 and Bollinger Bands 2σ).

Although we expected a range-bound market to continue, BTC easily broke above the 500,000 yen threshold. The background is hard to discern from daily and 1-hour charts alone, but looking at the 4-hour chart, it becomes surprisingly clear.

Now, let’s go through the flow step by step.

First, on August 15, BTC/JPY faced a ceiling near 500,000 yen due to thick profit-taking. In response, the price aimed to solidify a bottom, and it was supported around 395,000 yen, where about half of the upward move was retraced.

However, because the decline at that time was too rapid, the short positions’ buybacks did not go smoothly, and a large number of short positions remained.

The range continued afterwards, but on August 28 it tried to fall again. This time, buy-the-dip entered promptly around 450,000 yen, which is near half of the previous high of 500,000 yen. The rebound was fast again, causing a long lower wick.

As a result, the market remained heavily laden with unrealized losses on short positions.

From August 29, volatility subsided and Bollinger Bands squeezed, leading participants who wanted to follow the next trend to believe that a breakout would occur, providing enough fuel and motive to break through the 500,000 yen level.

Thus, as BTC price broke out of the squeeze, I see BTC/JPY reaching into the 500,000 yen range while sweeping in short covering.

■ Outlook for early September

From a dollar basis, the psychological level for BTC/USD is 5,000 dollars, and when converted to yen that is around 550,000 yen, so this will likely be the next resistance line.

There is a channel on the chart, but its angle is steep, so I don’t think this trend will last long. Also, from a temporal perspective, the uptrend since last month has lasted over a month, so a correction seems imminent.

Now we are in the stage of the final push.

If the price were to break below the channel, 500,000 yen would function as a support line, so unless there is some new headline, I expect the downside in early September to stay around here. Also, since the rise from 450,000 yen to the top around 500,000 yen retraced by about half, market participants are likely paying close attention to this line.

However, the main scenario is a range of 500,000–550,000 yen, but in a gradual uptrend like this, new market participants can surge, so there is a possibility of a sharp overshoot if 550,000 yen (5,000 dollars) is breached, which I will also keep in mind.

BTC is a high-risk investment. Please make investment decisions at your own responsibility.