Bitcoin Price Analysis: BTC May Find Support at $3,450


Bitcoin Price Analysis–Jan 14

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The Bitcoin network might be the most decentralized cross-border payment system out there with a direct endorsement from the SEC. Nevertheless, it cannot fully function in isolation and without participation from early adopters in SE Asia, prices may cave in.

To some extent, it has after authorities in China starved out liquidity after banning ICOs and especially exchanges. But sensing opportunity, the Japanese FSA opened doors for fleeing exchanges and projects. Because of this, the country’s embrace of new technology and allowing the Yen to recalibrate depending as dictated by a free market means it is the main player as far as cryptocurrency trading is concerned.

It will continue to be thanks to the self-regulation of exchanges, realistic regulators and sufficient protection of citizens. Remember, it is from Japan where there is a civil rehabilitation of Mt Gox victims and the trustee of recovered BTC is under a Japanese custodian.

Following rampant hacks, the Japanese FSA has strict policies in place to not only protect customers but exchanges in case of loss of funds through hacks. Aside from self-regulation the country’s FSA has said it will approve or reject the application from seven exchanges in the next two months.

The seven exchanges made through the thorough review process which involves answering 400 questions relating to AML, securities measures in place, financing, and management systems employed. This first phase takes four months and thereafter, the decision phase and consequent approval or rejection will take two months.

Bitcoin (BTC/USD) Price Analysis

Generally, investors and traders expected the market to expand, complementing gains of the week ending Dec 23. But, the meltdown of Jan 10 drove prices below the psychological $4,000 meaning there was no confirmation of early Jan higher highs neither were bull momentum strong enough to weather strong sell pressure.

Nevertheless, our previous trade plans were dependent on price action at $4,500 and although aggressive traders could also load at $4,100, we reiterated that there was more opportunity for further upsides once prices rally above $4,500—a major resistance level marking Dec 2018 highs.

Anyhow, sellers are now firmly in charge. In fact, sharp drops of Jan 10 and Jan 13 confirmation forcing prices below the main support line at $3,700 did usher in bears in a trend confirmation phase meaning the rejection of higher highs between Jan 7-9 reversing upsides of Jan 8 did mark a retest. While market participants expect a recovery, it is likely that BTC prices shall first drop to $3,000 before any meaningful support is found. But, before then, the 78.6 percent Fibonacci retracement of Dec high low at $3,450 may provide short-term support.

Regardless, should there be sudden reversals from these levels, we urge patience only recommending longs once our previous BTC/USD trade plans are met and bulls rally above $4,500. It’s a long shot but it is a safe stand now that prices are accumulating after Nov 2018 upheavals.

All Charts Courtesy of Trading View–BitFinex

Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.