Bitcoin has once again declined aggressively in the past 24 hours. The outlook has changed once again and now that BTC/USD is trading below $6,864 the probability of a decline to $6,000 has increased further. Near term, we can expect the price to fall to $6,567 where it is expected to find some sort of support. The fear and greed index is now back at “extreme fear” and the market is heavily oversold near term. Even though Bitcoin (BTC) has broken below key support levels, it can still see short term upside which might result in a rally towards $7,000 and if it is extended further in case of a short squeeze, to $7,238.
Ethereum (ETH) has declined much more aggressively compared to Bitcoin (BTC). ETH/USD has now declined to the key $120 support where it is likely to find some relief and rally near term. However, there is not much room to rally and the price will soon have to decline further. The cryptocurrency market remains in a strong downtrend and any move up would be an opportunity to sell or short sell. The EUR/USD forex pair has yet to decline below the key trend line support. Until and unless it is broken, it does not make much sense of be aggressively bearish on Bitcoin (BTC). The market may see some short-lived upside and EUR/USD may also rally for now but both have limited room to rally.
The S&P 500 (SPX) seems to be printing the same pattern as it did just before the beginning of a major financial crash. If this is any indication, we could be looking at a 1-2-year window at the maximum for the next stock market crash. This would be extremely devastating for the cryptocurrency market because if stocks backed by real companies and businesses are declining, it is only reasonable to think that cryptocurrencies that are driven up by mere speculation will be hit the hardest. Near term, we could see Bitcoin dominance (BTC.D) decline further with altcoins gaining against Bitcoin (BTC) but it is not likely to last for long and will soon be followed by another major downtrend.