Why Bitcoin Is Not Bullish Anymore

The recent bullish outlook of the cryptocurrency market has changed as the EUR/USD forex pair now no longer supports near-term bullishness in this market. Even though the forex pair demonstrated sufficient strength yesterday, it ended up losing much of its gain as the bulls lost momentum and the pair declined which could now possibly lead to a similar downtrend that came into effect after November 21, 2019. The changing outlook has now convinced us to be no longer bullish on the market until we have a decisive break past the 1.0772 level in EUR/USD.

We have seen how a decline in the strength of the dollar has been good for the market and a rise in the strength of the dollar has been bad for the market simply because cryptocurrencies are paired to the US Dollar on most exchanges and a rise in EUR/USD which is a leading contributor to the US Dollar’s strength strongly impacts the cryptocurrency market. We can see how a decline to the bottom of a falling wedge during the previous downtrend was followed by even further downside that led to the falling wedge being breached to the downside in BTC/USD, to the surprise of most traders. However, those that understood the influence that the EUR/USD forex pair and the S&P 500 (SPX) have on this market would have seen it coming.

Ethereum (ETH) and other cryptocurrencies at this point remain at a much higher risk as they stand to lose more than Bitcoin (BTC) in case of a bearish move. The 4H chart for ETH/USD shows how the pair’s recent bullish outlook can now be interpreted as bearish as we might be in a different part of the last fractal. Although there are many similarities between the two, it would be too early to say with certainty which part of the previous fractal the price is currently at. Contrarians might find it hard to believe that the market can decline much lower considering there is already too much fear in the market. However, the absurd rise in BTCUSDLongs now gives the market makers an incentive to do that which is why despite there being significant fear in the market near-term, the odds of an aggressive decline are quite high.