Why The Next Bitcoin Crash Will Be Huge

Bitcoin has shown no signs of a slowdown just yet after the recent rally that followed a bullish close above the 100-week exponential moving average for the sixth consecutive week. This will be another interesting year for Bitcoin (BTC). We can see on the daily time frame that BTC/USD has run into the 50 Day EMA and faced a rejection but it could still climb back above it or even close above it. If we look at the previous cycle and how the price traded before a major capitulation phase, we can see that it exhibited similar behavior. We saw the price close below the 50 Day EMA multiple times back then as well but that did not stop the inevitable; it merely delayed it. 

The ETH/USD chart on the Crypto Daily Charting Platform shows that Ethereum (ETH) has made an impressive move as well near-term but it does not have much room to rally further. That being said, a lot of altcoins have recently rallied against Bitcoin (BTC) and made impressive gains. This is likely to be short-lived though because the cryptocurrency market has yet to see further correction. If we go back to the BTC/USD chart, we can see how the next correction will be quite different. We saw how the price shot up parabolically during the previous cycle which was then followed by a slow bleed correction followed by an aggressive crash. The same is expected this time but there is more to it now because the price has formed a major double top which will have to result in a major correction. 

Geopolitical and economic developments that are about to unfold are not in favor of Bitcoin (BTC) and the cryptocurrency market. We saw Gold (XAU/USD) reach a six year high just recently which indicates what is going on and why the S&P 500 (SPX) may be about to see a major correction. None of this bodes well for the cryptocurrency market. Although we have seen a rally in BTC/USD recently to make it look like it is doing the same thing as Gold, the fact of the matter is that such rallies have historically led to major downside because they were staged. 

The EUR/USD forex pair as well as the USD/CNY pair are both at decision points now. The long term outlook of both is not in favor of the cryptocurrency market. If the Euro declines further, this might be a decade where we see the US Dollar become more expensive than the Euro meaning the EUR/USD forex pair might decline below 1 again. This does not seem unrealistic considering the ECB wants a weaker Euro and the United States keeps on helping the dollar with its action on both the US-Iran and US-China front. This is therefore not a time to be blindly bullish on Bitcoin (BTC) as there is a lot more to lose than to gain by hodling cryptocurrencies at this point.