There is a saying on Wall Street that bulls go up the stairs but bears go out the window. There is a lot of truth to it. If we look at the daily chart for BTC/USD we can see how the price struggled to rise towards the top of the descending channel but it took just one candle to erase the whole move. So, it takes a lot of time to build the confidence needed to help the price rally but it does not take much for the price to crash. We have seen that happen over and over again in the case of Bitcoin (BTC) which is why we now see a strong possibility of the price crashing not only below $8,000 but below $7,000 down to the bottom of the descending channel.
RSI on the daily chart for BTC/USD is about to see a bearish crossover and the same goes for the OBV indicator. We can see that it ran into a strong resistance and has now failed to break past it. All of this coupled with the extremely bearish outlook of the S&P 500 (SPX) points to a sharp decline in the cryptocurrency market in the near future. Regardless of the fact that you aim to make money on both sides, as a trader you inherently take a direction hoping deep down for either of two scenarios to happen. Either you expect the price to rise towards the top of the descending channel and potentially break above it or you expect it to decline towards the bottom of the descending channel and eventually break below it.
The Russell 2000 has an even more bearish outlook than the S&P 500 (SPX) and it has closed not only below the 50 day EMA but also the 200 day EMA. This is an alarming situation for cryptocurrencies which is we have been repeatedly discussing that these charts are all that matters, not that of Bitcoin (BTC) or Ethereum (ETH) or other cryptocurrencies. Let us take a look at the chart of Ethereum (ETH) anyway to see what we can expect in the near future. As we can see, the downtrend remains intact and we have no reason to be bullish on ETH/USD at this point. The same goes for other altcoins. The Fear and Greed Index has now climbed back to where it was before the downtrend began. So, we are primed for another downtrend from here and if that happens, there is a very strong probability of Bitcoin (BTC) breaking below the descending triangle which means that chasing the price to the upside here is not worth it as the decline could be a lot more brutal than we expect.