Bitcoin (BTC) has crashed below a key support since our last video analysis. There is not much left to speculation now as the move that we have been predicting for the past few weeks is about to come to fruition. The price has broken below $7,852 which is the 38.2% fib extension level from the December low to the yearly high. This is a big development and is extremely bearish. BTC/USD has now closed a 4H candle below it and there is a strong probability of a sharp decline of 20% or more from current levels. In case of a decline like that, we would be expecting the price to drop down to $6,717 if not much lower.
The EUR/USD forex pair has now climbed back above the 38.2% fib extension level and is eyeing further upside but BTC/USD has already begun its downtrend. Please note that if EUR/USD starts to decline as well and ends up breaking below the 61.8% fib extension level, then there would be a strong probability of BTC/USD breaking below the descending channel during the next downtrend. Bitcoin is now at a very vulnerable point and a sharp decline is expected. The ETH/USD chart also points to further downside. Ethereum (ETH) could fall a lot harder than Bitcoin (BTC) and might end up declining down to $144 or lower before it finds temporary support.
The S&P 500 (SPX) appears to be on the verge of a correction which does not bode well for the cryptocurrency market. We have seen the index close below the 5 Day EMA for the first time since the beginning of October. This is a bearish development for the stock market which makes it an even more bearish development for emerging markets like the cryptocurrency market. Bitcoin dominance (BTC.D) has room to rise further whereas Altcoin Dominance (Others.D) is now ready to decline having faced a strong rejection at the 200 day moving average. All of these developments point to one conclusion and that is an inevitable decline in the cryptocurrency market in the near future.