Bitcoin (BTC) Bears Need To Wait For Confirmation

Bitcoin (BTC) Bears Need To Wait For Confirmation

Bitcoin dominance has declined further. In our Saturday’s analysis on Bitcoin (BTC) we discussed how a falling Bitcoin dominance is good for the bullish morale because when Bitcoin dominance falls it means that people have confidence in cryptocurrencies other than Bitcoin as well. The dominance level has declined significantly from when we posted the chart and as we can see it is now resting on a strong support. If we are to see further downside follow in BTC/USD then this support for Bitcoin dominance cannot break. If Bitcoin dominance ends up breaking this support, then we should be prepared for a strong run up in altcoins which could potentially lead to new yearly highs in some altcoins in the weeks ahead.

Register for the CC Forum

We also talked about the falling wedge on the 4H chart and the possibility that it might see a shape change to fix a changed outlook and that is what seems to be happening. The falling wedge has assumed a new shape and we are now likely to see the price decline within that wedge to the low $7,000s before any further upside can follow. This decline is expected to be a quick one as a lot of stops are going to be run over. The downtrend on the RSI remains intact and it points to the strong probability of further upside from current levels. It is important to realize that we might see short term invalidation of the trend lines to confuse traders but what is supposed to happen always does and the price ends up completing the move without the fickle traders onboard.

Looking at the EUR/USD chart, we see that it shares a similarly weak outlook as Bitcoin (BTC) short term as we have seen a series of rejections at the 21 EMA on the 4H time frame. This is usually a sign of further downside to follow especially when the EMA alignment remains bearish. The pair is also likely to decline in a similar manner as Bitcoin (BTC) within a falling wedge in the days ahead. Let us now take a look at the S&P 500 (SPX). As we can see, the index has remained above the 50 Day EMA for the most part but it now looks extremely vulnerable to decline further. It is currently sandwiched between the 21 day EMA and the 50 day EMA but it will soon do the inevitable which is a decline below the 50 day EMA to formally begin the next downtrend. Just like Bitcoin dominance has to defend the key support if we are to see the bearish setup remain intact, we have to see Ethereum dominance break past the 38.2% fib retracement level if we are to see an altcoin rally. 

Investment Disclaimer
Related Topics: