Abundant materials but positions are balanced; whether the long-term trend will be revealed next week

A major U.S. fintech company’s acquisition of a U.S. cryptocurrency exchange and the Financial Services Agency’s ICO regulatory considerations, among other cryptocurrency-related headlines, made for an endless week, but the market did not react much.ICORegulatory considerations were examined, and while there were many cryptocurrency-related news items, the market did not react significantly.

■ The long-term downtrend is still continuing

2In late February, various cryptocurrency-related news broke. In contrast to South Korea easing its stance on cryptocurrency trading regulation, Japan’s Financial Services Agency was considering restrictions including injunctions on ICOs. On the business side, reports that a major U.S. fintech company acquired a large cryptocurrency exchange, and that Coincheck, amid a hacking scandal, was considering capital alliances with large corporate and financial firms, kept providing market clues.

However,BTCprice showed little interest in these reports. Despite the bustle on the pages, the long-term downtrend (downward channel in the chart) and the mid-term uptrend (support line) remained intact, forming a narrowing triangle pattern.

■ Why doesn’t it react to news?

Beginners or those familiar with other markets may think markets react to new material. If so, the current market would react strongly to new information, which may seem perplexing.

When you can’t keep up with market movements, it is important to return to fundamental principles.

In markets, there are buyers and sellers. It is evident that the market operates on this supply and demand.

Therefore, if news shifts supply and demand, prices move; if there is no change in supply and demand, prices do not move. Always keep in mind that prices move because supply and demand change.

Cryptocurrencies, in general, are very difficult to value analytically. They are currencies with technical underpinnings, so until we understand how much impact that technology has, it is impossible to verify a valuation level.

From this perspective,BTCappears to be formed by speculative maneuvering (this is the main reason it is called speculation), and because many participants rely on charts, it is important to trade faithfully according to the chart.

In the market, it is more important to understand chart formations and read participant psychology by drawing many lines on the chart than to gather information.

■Outlook for March

As stated at the outset, the current chart forms a triangle consolidation. This is a pattern where a downtrend in the highs and an uptrend in the lows overlap somewhere, with buyers and sellers on both sides, and when it breaks to one side, stop-loss orders trigger in succession and the market accelerates in that direction.

On the chart,around 3/7-3/8the triangle consolidation is expected to complete. Therefore, we will wait to see which way it breaks; if it breaks upward, we buy; if it breaks downward, we sell.

However, given the previous movements and investors’ psychological state, the probability seems to favor a downward move as the downtrend channel is being priced in. If it breaks upward, there is also a possibility of a sudden surge due to urgency, so taking a bold position in an upside breakout scenario could be effective.

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【Author】

Nishio Kawada(Kawada Saiō)

Trading Securities Market Division, Dealing Section

Born in Geneva, Switzerland. Graduated from Keio University.

His experience traveling to various countries gives credibility to his fan mentality analysis rooted in real-world experience.

Utilizing behavioral economics learned in college, he analyzes market participants’ psychological biases theoretically and applies them to trading.

His hobby is Shogi, with the skills of a high amateur, and the mid-game wrestle mirrors the market’s next move.

“The masses are always wrong” is his creed.

【Disclaimer】

The Bitcoin market information and other content provided on this site reflect the author’s personal views and do not guarantee the accuracy or safety of the content by the author, Traders Securities Co., Ltd., or our company. Also, such information is intended to be informative and does not constitute a recommendation of specific investment actions or strategies regarding cryptocurrencies. Please make your own final investment decisions. All profits and losses from investments belong to the investors. The author, Traders Securities Co., Ltd., and our company are not liable for any damages incurred based on this information.

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