This is going to be a very important year for Bitcoin (BTC) and our analysis on BTC/USD today would be one of the most important for the entire year. We have once again seen a major pump in the price of Bitcoin (BTC) but I have reasons to believe that this is nothing more than a smokescreen and a distraction from what is about to come next. The reason we have seen this move in BTC/USD is largely because of a critical move in the EUR/USD forex pair. We have seen the pair decline below the 200-day moving average. Although it may take a whole to close a daily candle below it, the fact is that it has made the big players in this market fearful and the price action shows that they are cashing out.
To most big players in this market, it is all about what happens in major currency pairs and on the stock market. They look at those charts to decide what to do in the cryptocurrency market because let’s face it, this is a very small market and it is highly manipulated by a small number of whales and market makers that play the average retail trader like a fiddle over and over again. However, once you understand their moves and look at all of it through their lens, you can avoid falling into their traps and make well informed decisions. The game plan here is clear and that is smart money systemically exiting the market in light of all that is happening on the global political and economic scene.
Ethereum (ETH) and other altcoins are a lot riskier to invest in at this point as we see investors becoming more risk averse heading into 2020. There is the US-Iran conflict, the US-China trade war and we have President Trump’s impeachment trial in the Senate as well as a US election all of which indicates that there could be some wild swings in the market. Considering that the S&P 500 (SPX) is already saturated, some of these events might turn out to be catalysts for the stock market to decline. If the stock market declines then altcoin pairs like ETH/USD are expected to decline much harder compared to Bitcoin (BTC).
The USD/CNY forex pair is also at a critical juncture. It would be the first time since mid-2018 for the pair to break a strong uptrend if it declines below the 200-day moving average this time. Doing so, it would be breaking a key trend line support. If the Chinese Yuan rises against the US Dollar, this means that big whales from China would be more comfortable cashing out at a time when they already see trouble brewing into the market. This could accelerate Bitcoin’s decline which is why it is important not to be greedy at this point. Every time a market is primed for a decline, we see news and events surface that accelerate that decline. In the case of the stock market and therefore Bitcoin, it could be the recent assassination of Iran’s top general, Qasem Soleimani. This could have a serious impact on a lot of events including oil prices and if the stock market begins its downtrend, the cryptocurrency market is highly likely to follow suit.