Bitcoin (BTC) has practically done nothing for the past few days. The recent move to the downside was a fake out which ended up liquidating the bulls and the price ended up bouncing back into the symmetrical triangle. However, the big question to ask after this is, “What happens now?” BTC/USD has bounced back into the symmetrical triangle but to what avail? Now, I would say that this Bakkt might end really badly but most of you won’t like it saying I’m always pessimistic and bearish on Bitcoin (BTC). However, this does not change the fact that it happened in December when everyone expected $6,000 to hold in anticipation of Bakkt lunch which was postponed after the crash but obviously insiders knew beforehand which is why they sold.
As for my bearish stance on Bitcoin (BTC), I have not always been bearish on Bitcoin (BTC). In fact, I have even been bullish on Bitcoin (BTC) at certain times in the bear market. However, it is very dangerous to be bullish at this point because the risk/reward is just not worth it. For instance, if we take a look at the ETH/USD chart, we can see that these pumps to the upside are in no way an indicator of real buying interest in the market and are thus not sustainable. So, I wouldn’t chase a small move to the upside risking a much bigger move to the downside. Things could unwind really quickly over the next few days as the market is in a stalemate even though Bakkt is around the corner. I’m bearish on cryptocurrencies in general and altcoins in particular which is why I expect ETH/USD to fall back into the descending channel.
In this market, anything could happen short term but the big picture remains conspicuous especially when you look at it in light of macroeconomic developments. The daily chart for Bitcoin dominance (BTC.D) shows us that we are now at a turning point which means that you have to pick a side. Either you are bullish and you expect Bitcoin dominance (BTC.D) to break support and fall lower or you are bullish and you expect it to hold support and start rising as the market declines. In any case, you have to make a decision now. The daily chart for ETH/BTC shows that the pair has run into a strong resistance. To expect it to break past it would be to expect that a new bullish cycle is about to begin. It is not just the cryptocurrency market, we find signs of a bearish continuation through the stock and forex markets as well.
If we take a look at the EUR/USD pair, we can see that it has failed to break past a key trend line support turned resistance which does not bode well for Bitcoin (BTC) and other cryptocurrencies. If we look at the S&P 500 (SPX), it has now rallied past $3,000 which is a strong psychological sell level. It is very likely that the stock market has topped out here and we are now on the verge of a major downtrend. The last time this happened was in October, 2018 and Bitcoin (BTC) followed soon after by declining in November, 2018 as it broke market structure. If the S&P 500 (SPX) declines this time, it will make the