Bitcoin (BTC) Price Action Marred By Confusion

Bitcoin (BTC) closed the day below the 38.2% fib extension level again but it has yet to crash. The price is trading sideways and it may take a while before it drops. That being said, this close below the 38.2% is very significant as it is the third consecutive daily close below this level. Now, we are expecting the price to crash below the fib circle and fall down to the 61.8% fib extension level from the beginning of the parabolic advance of December, 2018. It is important to note that this decline is not going to happen that easy. This is a very critical level that could lead to a massive downside from here. A lot of bears are eyeing this as their sweet spot to enter bearish positions.

This is why we saw so much volatility and indecision in the market. The market makers are shaking out the bears with tight stops so they don’t ride the price down for the easy money. Making money in this market especially if you are bearish is not going to be this easy. You cannot just put tight stops around certain levels and expect them not to be hit. Shorting the market is an expert’s game and if you are going to play that game then you have to be an expert. If we take a look at the BTC/USD chart, it is clear that we are not likely to see further upside anytime soon as long as the price remains below $12,000 but that does not mean that traders won’t be shaken out on both sides before the actual move happens.

If we take a look at the NVT indicator, we can see that we have a close below the RMA. This is a bearish sign and it foretells the crash that is going to follow. The same goes for the RSI, it tells us that there is ample room for significant further downside. If we take a look at Ethereum (ETH), we can see that the price has fallen below the bear flag and is now struggling to hold its ground. It has faced a strong rejection at the 61.8% fib extension level from the recent top and is now likely to fall further from here. That being said, it may continue to keep on printing big wicks to the upside to shakeout greedy bears.

The S&P 500 has already begun its decline and we can see that this time there is a lot more room for downside which means it is going to crash hard and that opens up the possibility of a massive crash in Bitcoin (BTC) and other cryptocurrencies. We can see that the last time the S&P 500 crashed, Bitcoin (BTC) crashed as well as it broke below $6,000 and declined to its December, 2018 lows. Bitcoin (BTC) dominance tells us that we might see Bitcoin (BTC) continue to outperform other coins. Bitcoin dominance would not be rising if we were in a bull market because in a bull market altcoins outperform Bitcoin (BTC). If we take a look at recent liquidations, we can see that around 9.9 million short contracts were liquidated. This tells us that it is not going to be easy to short the market because the market makers would do what they can to discourage the bears from riding the price down, and when they give up all hope, that is when we will see the price decline.