Bitcoin (BTC) has declined massively right after the Bakkt launch. It has finally broken below a key symmetrical triangle just when the majority of traders were hoping for a rally to the moon. This is nothing surprising considering smart investors buy the rumor and sell the news. Even though this has recently become something common in this market but that does not change the fact that the market pumps and dumps in the same manner every hype cycle. While the price did crash because big investors bought the rumor and sold the news, we need to realize that that’s not the whole story. The fact of the matter is that at the moment there is a serious lack of interest for futures in the market. Investors on Wall Street are not interested in Bakkt at this point when the market is this manipulated and trading volume is this low.
We have seen many moves to the upside in BTC/USD after sudden crashes as investors bought the dips. However, those moves were meaningless for the most part as the price declined soon after despite earlier candles leaving long wicks to the downside. This goes on to show that the momentum has turned bearish. The Stochastic RSI on the 1H time frame for BTC/USD indicates that we are very close to a decline. On the ETH/USD front, we have seen the price decline back into the descending channel. It has now closed below the 200 EMA on the 4H time frame which is a particularly bearish development. Ultimately, we expect ETH/USD to continue its descent within this channel until it finds its true bottom below $80 in the weeks and months ahead.
Taking a look at the S&P 500 (SPX), we can see that the index is not very likely to keep surging higher. We are very close to the beginning of the next downtrend and that is what really matters in the context of the cryptocurrency markets because recent declines in the stock market have corresponded to strong downtrends in Bitcoin (BTC). The same is likely to happen again soon as we see the index decline. Meanwhile, the EUR/USD pair has failed to gain ground and has been repeatedly closing below the 21 day EMA. If this continues to happen, we will see a sharp decline in the weeks and months ahead which would be devastating for Bitcoin (BTC) and other cryptocurrencies. The Fear and Greed Index has been trading sideways for the most part which shows us that crypto investors are still quite confused as to the next move of Bitcoin (BTC). However, if we look at the monthly chart for BTC/USD, it all makes sense as we are now on the verge of a major downtrend and it is only a matter of time that BTC/USD breaks below the descending triangle to begin that downtrend.