Everyone knows now that China's exchanges will undergo scrutiny and likely require strict regulations before being allowed to continue. Today we found out that BTC-C is shutting down, and possibly in the coming days we'll see other exchanges coming out with the same news. The BTC-C shutdown has been the major catalyst for this second wave of downward momentum.
As I've mentioned in previous ideas, Brazil tends to over shoot targets in both directions. As we were trading ATH's, the Brazilian market was trading with a 20% premuim. It's possible with a major correction that this premium completely reverses and we see prices anywhere as low as 5-10% cheaper than US exchanges. Many professional traders are calling a 3k USD psychological floor on this bear run. That would be equivalent to ~9.400 BRL. If Brazil manages to bottom out at 5% below US prices, we could see a 8.900 BRL bottom.
Based on the charts, I've put together a pitchfork on the weekly candles. According to the pitchfork, we should bottom out at ~10.240 BRL, which coincides with a 61.8% fib retrace. However, if this support is broken, the next support level according to the charts coincides with the scenario mentioned above at ~8.900 BRL.
It might be possible therefore to lowball some limit orders just under 9k BRL for a nice re-entry. Needless to say, everyone should be in fiat right now. We're in a strong downward spiral with more FUD to come so it's difficult to pick the bottom. Good luck every one!
As I've mentioned in previous ideas, Brazil tends to over shoot targets in both directions. As we were trading ATH's, the Brazilian market was trading with a 20% premuim. It's possible with a major correction that this premium completely reverses and we see prices anywhere as low as 5-10% cheaper than US exchanges. Many professional traders are calling a 3k USD psychological floor on this bear run. That would be equivalent to ~9.400 BRL. If Brazil manages to bottom out at 5% below US prices, we could see a 8.900 BRL bottom.
Based on the charts, I've put together a pitchfork on the weekly candles. According to the pitchfork, we should bottom out at ~10.240 BRL, which coincides with a 61.8% fib retrace. However, if this support is broken, the next support level according to the charts coincides with the scenario mentioned above at ~8.900 BRL.
It might be possible therefore to lowball some limit orders just under 9k BRL for a nice re-entry. Needless to say, everyone should be in fiat right now. We're in a strong downward spiral with more FUD to come so it's difficult to pick the bottom. Good luck every one!
1. OkCoin and Huobi exchanges still set to shut down (possibly today)
2. Apparently Chinese exchanges can still technically function crypto-to-crypto
So we have a mix of bear and bull news. The overshoot to the downside didn't pan out. We could reverse as high as 23.6% fib (~15.000) before meeting resistance again.
Will be interesting to see if this reversal holds. Volume supports it. The low might have been in.