Crypto Industry News:
The Japanese Financial Services Agency (FSA) - the national financial regulator - proposed lowering the leverage limit for cryptocurrency margin trading from 4x to 2x. The FSA announced the proposed measure on January 14 in a cabinet ordinance - an official ordinance issued along with the new law.
The proposal, if adopted, would be the first case for the Japanese government to regulate the margin trading ratio. According to Nikkei, the state has not previously made any laws.
The FSA allegedly plans to enforce the order in April, when the revised version of the Financial Instruments and Stock Exchanges Act enters into force. The agency accepts public comments on the regulation until February 13.
Margin trading allows investors to use borrowed funds to increase their potential profits, but it is also a high-risk risk activity because it introduces the possibility of losses exceeding the investor's initial investment. According to Nikkei, the FSA aims to protect investors against "excessive speculation and the risk of losses caused by volatility."
Technical Market Overview:
The BTC/USD pair has made another marginal higher high at the level of $8,836 (at the time of writing the analysis) and a Shooting Star candlestick pattern has been made at this level. Currently, the bears are testing the local technical support at the level of $8,573, but the corrective move might extend lower towards the level of $8,405. Please notice, that this high was made on lower momentum than the previous one, so there is a negative divergence present. Before, the pair har tested the technical support located at the level of $7,601 - $7,581 and bounced higher, which means, the support had been recognized by the market participants as valid and they wanted to resume the recent uptrend. Moreover, there is no possibility to move lower at the price of Bitcoin unless the support is clearly violated.
Weekly Pivot Points:
WR3 - $9,744
WR2 - $9,058
WR1 - $8,561
Weekly Pivot - $7,905
WS1 - $7,428
WS2 - $6,754
WS3 - $6,270
Trading Recommendations:
The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still down. All the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend. There is a possibility that the wave 2 corrective cycles are completed, so the market might be ready for another impulsive wave up of a higher degree and uptrend continuation.
