Bitcoin (BTC) Resumes Downtrend To $9,900

Bitcoin (BTC) Resumes Downtrend To $9,900

Bitcoin (BTC) has finally declined below $10,400 to begin its downtrend. It kept stalling this move for long but now we have seen it decline following the same fractals as it did just before in August, 2019. There are strong similarities between the two fractals. If we take a look at the 1H chart for BTC/USD, we can see that the price tested the top of the trend line resistance and declined from there to the 200 EMA last month. The same thing has happened this time as well. In addition to that, we have seen Bitcoin (BTC) find support along the 200 EMA just as it did before until it declined aggressively from there to complete the big move to the downside. The exact same thing has happened this time as the price has declined below the 200 EMA after a long sideways movement.

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 We expect the price to decline to $9,900 from here before finding temporary support. The reason why we expect this to happen is because the $9,900 level coincides with the 61.8% fib extension level. The price declined in a similar manner in 2014 before it began to trade sideways and eventually broke below the symmetrical triangle to begin its formal downtrend. There is a lot of sideways movement here because traders are still very confused as to what is going to happen next. The bears expect the price to decline but the bulls are not convinced yet. There is still too much bullish euphoria in the market but it will die down when we see a break below the symmetrical triangle. 

For now, it is only a matter of time before the price declines to $9,900 to complete this correction. If we take a look at the ETH/USD chart, we can see that Ethereum (ETH) and other altcoins rallied aggressively against Bitcoin (BTC) in the last 48 hours. However, that move came to an end when the price declined below the rising wedge. We are going back to the old order which is altcoins falling more than Bitcoin (BTC) in periods of a downtrend. Lastly, let us take a look at the US Dollar Currency Index (DXY). We can see that the index is very close to a breakout. Global political and economic developments tell us that the US Dollar is very likely to strengthen further. We are now close to seeing a break above the ascending triangle in DXY which does not bode well for Bitcoin (BTC) and other cryptocurrencies because a strong dollar means a lower price for Bitcoin (BTC) in dollar terms.   

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