Bitcoin (BTC) made another big move to the upside today that pushed the price to a new yearly high. We can see on the 4H chart for BTC/USD though that sustained growth is lacking. It is mostly a pump followed by sideways consolidation and then another pump. We are now likely to see a downtrend follow from here but so far BTC/USD remains above the 61.8% fib level. In case of a decline, we would be looking at strong break below this level which will result in a decline down to the key trend line support.
For months now, this trend line support has held and it has been a source of optimism for retail bulls. However, it is not expected to hold for long and will be broken sooner or later. The only concern at this point is which part we are currently at in the previous cycle. Either we could see the correction come to completion this year or Bitcoin may be about to enter another multi year downtrend. It would not be surprising if it did and will lead to an exodus of massive capital from the altcoin market in a slow bleed manner starving most new projects.
The daily chart for BTCUSDLongs/BTCUSDShorts shows how the recent price move got the bulls all excited again. We are now looking for a retest of the 1.272 fib level on this chart. If it faces a rejection there, then we can expect a downtrend that would most likely coincide with a downtrend in the pric of Bitcoin (BTC) and the rest of the market. It is important to realize that BTCUSDLongs/BTCUSDShorts could still shoot up to a new all-time high.
As the next halving nears, a lot of investors are beginning to be more bullish on the market. Never in the history of BTC/USD has it been a given that the price will absolutely rise before a halving event. We have seen it rise after halving but that is more a result of Bitcoin’s long-term trend. Speaking of that, it is now important to realize that BTC/USD has broken the pattern of higher highs with the ongoing cycle as the peak was lower than the one before. This should be a clear warning to many overly enthusiastic investors that there is a good chance that Bitcoin may be entering a larger bear trend and that there is no reason to be bullish just yet.