Why Bitcoin (BTC) Traders Should Be Skeptical 

Bitcoin has now shot past the $8k level and is hovering around $8,268 at the time of this analysis. We can see on the 4H chart for BTC/USD that it ended up pumping past the $8.4k mark before it started to decline. Many retail traders have become far too excited about this. There is too much optimism in the market before the next halving but it is very important to realize that BTC/USD has yet to break past a cluster of resistance levels below $9k. Until and unless that happens, it could be very risky to be long on the market. We saw during the 2016 halving that the price crashed before, during and after the halving. 

There is no reason to think that a decline like that could not happen again especially as the price seems to be at the same point as it was in November, 2014. It has just tested a previously broken market structure and is now expected to begin a downtrend. This would be a very devastating move for the entire cryptocurrency market because what lies ahead is capitulation. Please note that the previous capitulation pulled the price below the already established lows. If the same were to happen this time, we are looking at a decline below $3k for the price to find a bottom between $1,200 and $1,800 before the next potential bullish cycle. This is not the time to be greedy when the EUR/USD forex pair has just declined back below the 200-day moving average. The last time it happened we saw a strong downtrend not only in EUR/USD but in the cryptocurrency market as well. 

We can also see that the S&P 500 (SPX) has seen a slow down and it may be about to begin a downtrend. Meanwhile, the altcoin market continues to be in confusion as to what is going on with Bitcoin (BTC). The daily chart for ETH/USD shows the price in total confusion as to what to do next. Bitcoin (BTC) keeps pumping and altcoins like Ethereum (ETH) keep losing more ground. We have now finally seen ETH/BTC decline below the symmetrical triangle. The USD/CNY pair has also begun its downtrend below the 200-day moving average. All of these factors point to a bearish outlook of the cryptocurrency in the near future. It is still possible that BTC/USD may rally after the upcoming halving but there is a lot that could happen between now and the upcoming halving.