Bitcoin Manipulation May Not Be Over Yet

Bitcoin has seen some bearish moves in the recent past. The price declined below the 200 day moving average. This is a bearish development but it might take a while for the price to really begin that strong downtrend. We have seen BTC/USD test the top of the descending channel and it is now only a matter of time for it to decline to the bottom of the descending channel. Another possibility is that the price might end up breaking the descending channel to break to the upside and begin a new uptrend but if it was meant to happen, I think we would have seen it by now. One thing that is important to realize is that the price might have declined below the 200 Day MA but it still remains above the 200 Day EMA. As long as it remains above that level, it is risky to be bearish on Bitcoin considering the manipulation that is going on in this market.

Yesterday, we saw another case of manipulation when traders were misled into thinking that we might decline further but the price ended up rallying hard instead. There is nothing wrong with traders having the false impression of what is going on but the manner in which it happened was extremely manipulated. Prior to that, we saw bearish momentum developing and when that momentum was about to push the price down, the market makers and whales came to the rescue and pumped it higher not only to liquidate the bears but to delay the decline once again. It only makes sense for them to do this because in this market there is no regulation. They have nothing to fear if they keep doing this which is why they will continue to do this again. For retail traders to protect themselves it is thus important to avoid trading around inflection points.

Ethereum (ETH) and Bitcoin (BTC) have both seen significant downside recently but there is a difference. ETH/BTC still remains in a short term uptrend and Ethereum Dominance (ETH.D) keeps on rising while Bitcoin Dominance (BTC.D) keeps on falling and recently declined and closed below the key 100 day moving average. This has increased the odds of altcoins continuing to rally against Bitcoin (BTC) for the time being which makes it a risky move to be betting against ETH/USD just yet. That being said, we are very close to the price breaking below a key trend line support. If that happens, it would be a sign to be short term bearish again.

However, if the price keeps holding that support and rallies higher, then I would not be surprised to see another manipulated pump possibly extending to the $200 region to shake out further stops. The Fear and Greed Index has seen a decline and is now consolidating again. Considering that the index was declining before it entered consolidation, there is a strong probability that it might rise after it exits consolidation which is yet another reason to be very careful trying to be bearish on the market just yet. That being said, there is absolutely no reason at all to be bullish on the market either. This is a time to look for bearish not bullish entries.