Bitcoin (BTC) is presently in a do or die situation. The price has once again plunged below $6,000 and is now trading just above the previously held $5,800 level. If the price falls below $5,800 and stays below $5,800 for the next few days, it will invalidate a bullish bias and may lead to a long term bear market. On the other hand, if Bitcoin (BTC) stays above $5,800 for the next few days and closes the monthly candle above $5,800, it would mark the beginning of the next bullish impulse. Whichever way the market moves, it is going to happen in the next few days and will have far reaching effects on the price of Bitcoin (BTC).
The RSI level for Bitcoin (BTC) on the daily chart is back in the oversold level. It is also trading in a triangle, just like the price of Bitcoin (BTC) and is expected to make a decisive move in the next two days. A break below the triangle will drag this correction further, whereas a break above would mark a potential reversal. The crypto market outlook seems no less confused than the stock market. With all that is going on with the US China trade war, Trump’s policies and the negative outlook of financial markets in general, investors have been approaching cryptocurrencies with a confused mindset. This is not surprising to see considering blockchain is a new technology and investors have yet to see how cryptocurrencies fare in a financial crisis. It is true that many governments and financial institutions have likened cryptocurrencies to commodities or private money but commodities like Gold or Silver are also not out of the woods.
One positive indicators for commodities in general and cryptocurrencies like Bitcoin (BTC) in particular is that commodities have reached their lowest valuation against stocks, according to a research report by Goldman Sachs. This means that commodities prices are at an all time low compared to the S&P 500. It also means that whenever something like this has happened, a reversal has followed that has pushed commodities prices higher against stocks. If this were to happen again, we can expect commodities and cryptocurrencies to rise even if the stock market falls.
One possible reason for the hold off could be that institutional investors are waiting to liquidate their stocks positions or waiting for the crypto market to show an actual sign of reversal. Some may argue that there are not enough financial vehicles for institutional investors to get into cryptocurrencies but that does not seem to be the case. Bitcoin Investment Trust (GBTC) allows investors to invest into Bitcoin (BTC) without exposure to the actual asset. There are Bitcoin (BTC) Futures offered by CME and CBOE that allow institutional investors to get involved. A Bitcoin (BTC) ETF might be a game changer for the general public but institutional investors are already all set to get into the game. The only question is where and when, not what and how.