Bitcoin Finally Completes Correction But Recovery Not In Sight Yet

Bitcoin Finally Completes Correction But Recovery Not In Sight Yet

Bitcoin (BTC) has finally crashed like we expected. It broke below the symmetrical triangle as well as the descending triangle both and has now declined even below the 200 day EMA. We have been calling for this move for weeks now but some have been calling us permabears and being overly bearish on cryptocurrencies while the reality on ground was that the situation couldn’t have been interpreted any differently. There was no other way to look at it. Sure, some people thought there were 50-50 odds of BTC/USD breaking up or breaking down but I’ve never believed in that because that’s gambling. If you think the odds are 50-50 then you might be better off buying and holding or thinking about long term investment instead of trading. 

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We not only predicted the decline in BTC/USD but we also predicted the manner in which it was likely to decline. RSI on the daily chart for BTC/USD shows some circles and rectangles that we sketched a long time ago before any of this happened. This chart has not been altered and the lines are as they were before. If we look at the RSI, we can see that it has declined exactly to our target level. If we zoom out, we can see that the price has now declined to another descending triangle that it might eventually have to break out of. However, one thing that is pertinent to mention is that just as something doesn’t go up forever, it doesn’t come down forever. When the price rallied past $6,000 I said it was a manipulated move. The recent decline is not much different than that in terms of manipulation because it was all about liquidating the longs. 

A close look at the 4H chart for ETH/USD shows us that we might have an ascending triangle in the making that could lead to further upside but until the price breaks past the 38.2% fib retracement level, there isn’t much hope. The reason the cryptocurrency market crashed yesterday was because of a big move in the S&P 500 (SPX). When the index closed below the 21 day EMA, it was a sign for the big investors that downtrend was going to follow and thus we saw a sharp decline soon after the stock market closed. Ethereum (ETH) and Bitcoin (BTC) dominance levels will play a key role in the near term outlook of the market so we need to stay focused on those. If Bitcoin dominance falls below the 21 day EMA and closes below it, we might see a rally in altcoins follow soon after. That being said, any short term bullishness is not worth the risk in the grand scheme of things. 

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