Bitcoin Crash Or Another Bear Trap?

0 7

Bitcoin has finally crashed and made the move that we have been calling for weeks. The price declined sharply below $8,544 and made a brutal move to the downside. However, just before that move, a lot of traders and analysts were busy drawing falling wedges on the BTC/USD chart. We warned against this and stated clearly how this wedge will be invalidated and broken to the downside. It happened and the price fell through it. Now that the price has finally begun a downtrend, let us see how low it could go and whether or not this is a good time to short the market.

If we compare the current fractal with the previous one, we can see some similarities on surface but the manner of the current decline is quite different than that of the previous one. This time we have seen the price decline in a slow bleed manner. The difference is that we are now very close to the 38.2% fib extension level that extends from the December 2018 low to the yearly high. It would be very improbable for the price to just fall through this level without trading sideways in this territory for a while. This increases the probability of a short term relief rally which in the case of ETH/USD could get out of hand if we see a rally past $188. If that resistance is breached, we could see the rally extend towards $200 to begin a major stop hunt.

The EUR/USD forex pair has now found support on top of the 38.2% fib extension level. As long as it remains above that level, we can expect further upside not only in that pair but in the cryptocurrency market as well. Bitcoin dominance (BTC.D) keeps on showing signs of weakness while Ethereum Dominance (ETH.D) still remains strong. We have also seen ETH/BTC break a key trend line resistance. Considering that both ETH/BTC and Ethereum Dominance (ETH.D) have yet to test the 200 day moving average, we can expect short term bullishness in the market ahead. If it turns out to be overly bullish in case of a break past the 200 Day MA, this could be a very painful scenario for the bears which is why this might not be a good time to be short on the market just yet. 

Source link

You might also like

Pin It on Pinterest

Share This

Share this post with your friends!

WhatsApp chat