BTC/USD

Bitcoin markets rallied significantly during the trading session on Wednesday, gaining over 8%. We are currently testing the $9500 level, an area that is resistant, and extends to the $10,000 level. There is a significant amount of noise between the $9500 level and the $10,000 level, so I think it’s only a matter of time before the sellers get involved and start selling. However, if we were to break above the $10,000 level on significant volume, I think that we will continue to go much higher. Signs of exhaustion between here and there should be attention getters as short-sellers could get aggressive in that area. I think the next couple of days are going to be crucial for Bitcoin, and the reaction will be crucial going forward. Expect volatility, but I would be very cautious about jumping it now, regardless of the direction.

BTC/JPY

Bitcoin markets also rallied against the Japanese yen, as we press up against the ¥1 million level. This is a vital area for the longer-term attitude of the markets, and I believe that this is the most important Bitcoin chart to follow as 40% of Bitcoin trading is done in Japan. I believe that the markets will continue to be driven by what goes on there, so the next 24 hours will be crucial. In fact, I would stay out of this market until we got a bit of clarity on the daily candle. If we can break through the ¥1 million level with volume, that should be a very bullish sign and I believe the buyers would jump in. However, we pull back from here we may need to “reset” to try to build up the uptrend. A breakdown below the ¥880,000 level probably sends this market lower again.