It is a sad day in the crypto community as the SEC has rejected a BItcoin (BTC) ETF Proposal presented by the Winklevoss Twins. Earlier this month, this ETF proposal became the cause of a lot of hype and FOMO which pushed the price rapidly from $6,200 to around $8,300 as can be seen on the BTC/USD daily chart above. This misled many investors into thinking that the correction is over and Bitcoin (BTC) is out of the woods. While it may be true that we might be close to the end of this extended correction, it is likely that Bitcoin (BTC) may fall below $6,000 to find a proper bottom.
Current market condition indicators, including RSI and Demarker signal that the next few days could be choppy as Bitcoin (BTC) sets for a steep fall after breaking out of the rising wedge. This might result in a sharp fall to $6,200, facing resistance at 100 EMA and 50 EMA as it falls. The EMA alignment continues to be bearish and Bitcoin (BTC) is likely to complete one final wave down before this correction comes to an end. It is pertinent to note that Bitcoin (BTC) just faced rejection at long term downtrend resistance line which will be seen as a continuation of the downtrend. Therefore, Bitcoin (BTC) is expected to fall further. Moreover, if the downtrend continues, Bitcoin (BTC) will have to form a lower low which means that a low below $5,800 is expected in that case.
Conditions on the 4H chart for BTC/USD above shows Bitcoin (BTC) to be nearing oversold levels short term but the downtrend is likely to continue. Squeeze momentum on the chart above also indicates further downside to be expected. On the 4H chart, the EMA alignment continues to remain bullish as before and Bitcoin (BTC) has not yet broken below the 50 EMA to trigger any alarms. However, the price action looks weak and if it breaks and closes below the 50 EMA, it is likely that short term panic selling will ensue pushing the price all the way down to $6,200 and lower. All things considered, Bitcoin (BTC) is likely to set its affairs in order by the end of July. Barring extenuating circumstances, the month of August will most likely be a favorable one as Bitcoin (BTC) might start the next bullish cycle in the first week of August.
Bitcoin (BTC) ETF rejection may seem to be bad news for cryptocurrency enthusiasts but there is a huge upside to it that many are ignoring. It is a fact that a Bitcoin (BTC) ETF would have attracted a lot of traditional investors and new capital would have entered the market. However, it is also a fact that Bitcoin (BTC) ETF FOMO would have bled most altcoins dry as money would flow from them to Bitcoin (BTC). This would mean not only missing out on the altcoin rally most of us have been expecting and so relentlessly waiting for, but also killing some promising new cryptocurrency projects with low market caps.