Bitcoin (BTC) Inches Closer To The Beginning Of Another Downtrend

Bitcoin (BTC) has moved closer to the beginning of its next downtrend as it cannot perpetually trade within the rising wedge it is currently trading in. Most such rising wedges have led to brutal declines in the past which is why we have no reason to believe this time will be any different unless we have a clear break past the $8,384 level. So far, the price has failed to close above this level. What we saw just recently in the form of a massive spike now appears to be another case of manipulation which is expected to meet the same fate as before. Near-term, we can expect BTC/USD to test the 61.8% fib retracement level around $8,161.47 before the next downtrend kicks in. 

Major factors that influenced the price of Bitcoin (BTC) in the recent past are now beginning to seem inconsequential as most major markets have resumed what they were previously expected to do. Uncertainty has died down but investors are still concerned that the stock market is over saturated and therefore primed for a correction in the near future. Historically, such declines in the S&P 500 (SPX) have had a negative impact on the cryptocurrency market. BTCUSDLongs/BTCUSDShorts ratio is still at an alarmingly high level and is expected to be a major catalyst in bringing about the next brutal downtrend which is also likely to lead to capitulation. The price of Bitcoin (BTC) is very likely to decline below $3k before the beginning of the next potential bullish cycle.

Bitcoin dominance (BTC.D) is also an important indicator of what can be expected to happen next in the cryptocurrency market. Now that it has found support on the 38.2% fib extension level, we can expect a move to the upside in dominance which generally means one of two things. Either the market crashes with Bitcoin holing its ground better compared to other coins or Bitcoin pumps while the rest of the market lags behind. 

The 4H chart for Bitcoin dominance (BTC.D) indicates that this could be a time when we see one more spike in Bitcoin (BTC) towards $8,200 while the rest of the market lags behind. WE could see some sideways movement after that and the altcoin market will attempt to catch up with small to medium cap coins outpacing Bitcoin (BTC) during that period. However, Bitcoin dominance (BTC.D) now remains above 70% and eyes a break higher. If and when it shoots past the 72% mark, that would be a point where we could expect the cryptocurrency market to capitulate.