Bitcoin (BTC) Finally Tops Out, Likely To Begin Its Next Downtrend From Here

Bitcoin (BTC) has rallied significantly in the past 24 hours and has now run into an important resistance zone around $11,816. This is the level that served as the point of rejection during the bear trend of early 2018. We saw it lead to a 43% decline in BTC/USD just after it had topped out for the third time. We have a very similar situation here as Bitcoin (BTC) has topped out for the third time here as well and interestingly enough, it is at the same level that it topped out for the third time during early 2018. Does this mean that the price could fall 43% from here? It is possible, yes but this time we expect a decline to the 38.2% fib extension level which would correspond to a price of $7,872 and a correction of around 33%.

This whole move to the upside for BTC/USD as well as the rest of the cryptocurrencies was about revisiting a resistance. So far, Bitcoin (BTC) has faced a strong rejection at this level but we will have confirmation at the end of the day. Bitcoin (BTC) is still trading above the 50 day EMA which is a short term bullish indicator but the big picture remains unchanged and Bitcoin (BTC) is highly likely to fall aggressively in the weeks and months ahead. If we take a look at Crypto Twitter, we can see that a lot of traders are very optimistic again all of a sudden. That is never a good sign because most of the time we see it followed by a sharp decline as the whales dump on most of these overly excited bulls. One thing we need to realize is that the dumb money never wins. This means the majority always ends up losing to a minority.

So, if you think all the people chanting for “Bitcoin to the moon” are going to win and the people that are waiting for a sharp correction are going to lose, you need to take a look at what has happened in the past. These past few days have been a perfect opportunity for the whales to make it believe as Bitcoin (BTC) is a good hedge against the stock market and now you can see a lot of analysts from CNBC and other media networks talk about it.

If we take a look at Bitcoin dominance (BTC.D), it is on the verge of a massive breakout. The ascending triangle seen on the weekly chart is close to be broken to the upside. All it is going to take is a sharp decline in the cryptocurrency market and we would see this breakout to the upside because as the market declines Bitcoin (BTC) is likely to hold its ground better than most other cryptocurrencies. All of these indicators point to the same conclusion and that is that we are far from the beginning of a bullish cycle just yet. Every move like this suckers in most of these weak hands that go like “Oh my god, I think I’m missing the bull run”. When these people are finally trapped in and shaken out, that is when we will see the next bull run begin.