China has halted trading on its stock exchange just 15 minutes into the days trading. Stocks initially fell by 5% which triggered an automated closure, stocks then fell a further 2% when the exchange reopened which forced the exchange to close for the remainder of the day to prevent further losses. This is China’s second stock market closure in 3 days due to plummeting share prices.
Today’s crash was a lot sharper and far earlier in the days trading.
Image courtesy of Michael McDonough
It’s bad news for Chinese stocks but as we’ve seen in the past when traditional stock markets take a dive, Bitcoin swings upwards. This upwards price action is a great indicator of Bitcoin’s future as a market anchor which traders use as a safe haven during times when fiat currencies and inflated stocks are crashing.
Within minutes of China’s stock exchange closing Bitcoin started to rise and at the time of publication it had increased by almost 200 CNY in 6 hours.
The price surged once, stopped to regain its strength and then hit its 1.618 fib extension target as shown in the 1Hour chart below.
Sideways movement movement with some down side isn’t uncommon between pumps. It often happens as people take profit and wait for the next surge as is common practice amongst traders to protect their earnings.
Interestingly, this brings us to the top of the flag created by the the last two major price surges as shown in the 1Day chart below.
If the price can make a clear break through the top of this flag, or even just make some sideways movement sitting above it, then it could signal a third wind for the current bull market.
For now, keep your eyes on your charts and don’t forget to bank your profits!