Bitcoin Bulls Are Still In Control 

Bitcoin bulls had a rough day yesterday as the price crashed by almost $1k in a matter of minutes. This took many traders by surprise and $148 million in longs were liquidated on the Bitmex exchange alone. This move was quite surprising in the way it happened but it was not surprising that it happened. In our previous analyses on the market especially our last one for the day which was on ETH/USD, we specifically said that “Ethereum could see a sharp retracement before bullish continuation”. While I expected the price to decline down to the trend line support over the weekend, it ended up happening a lot sooner than I had anticipated. 

Now that this move is complete and BTC/USD has crashed down to the 200-moving average on the 4H time frame and bounced off it, we might be looking at the beginning of a major uptrend. One of the reasons the crash happened in this manner apart from the obvious motive of running stops below $9.7k was that the big players did not want the momentum to break. They did not want the correction to get out of hand. As we can see on the 4H chart, during the previous parabolic run up, we saw that the last uptrend was a lot more aggressive. If the same thing has to happen again in a rally towards $12k, then the correction had to be completed soon. Now that this has happened, we can expect a rally towards $11.7k from here as the bulls are still in charge. 

It is important to realize though that saying that the bulls are in charge does not mean that it is retail bulls that are making these decisions. As we have discussed before, this is going to shape up to be a major bull trap. So, the price is expected to shoot higher from here to keep the FOMO high. However, the manner in which the market has rallied which we also alluded to in our analysis on Ethereum dominance (ETH.D) yesterday, it is not going to end well for a lot of retail traders. For now, things are in favor of Bitcoin. The S&P 500 (SPX) made a new all-time high yesterday and the EUR/USD forex pair is likely to see a bullish reversal. This means that BTC/USD and the rest of the market has room to rally for now but there should be no doubts about the fact that it is going to end terribly bad for the majority of retail bulls buying into this FOMO without a risk management strategy in place.