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Bitcoin Correction May Not Be Over Yet

Bitcoin Correction May Not Be Over Yet

The price of Bitcoin declined sharply as we expected it to. It has now not only declined down to the 200-day moving average but it has also started another day below it. This has now increased the odds of further downside. At the moment, the outlook remains bearish. On the 12H time frame for BTC/USD, the price remains below the 200 EMA. As long as that is the case, we will continue to be bearish on the market. If we see a close above the 100-day moving average, the odds of a bullish reversal would improve. Barring that, we are looking at a decline down to $8.2k or lower. 

The daily chart for Bitcoin dominance (BTC.D) shows that it has now found support on the 38.2% fib level. It is still struggling to break past the 50-day EMA. Meanwhile, altcoin dominance has found support on the 50-day EMA and if the bulls come to the rescue, we can expect a short-lived uptrend but the odds of it declining below the symmetrical triangle are much higher. It is important to note that the altcoin market stands to lose a lot in the days and weeks to come especially if the outlook remains as bearish as it is now. 

The stock market has also seen a sharp decline recently. The S&P 500 (SPX) is now trading below the 100-day moving average and risks a decline down to the 200-day moving average. The fact that the cryptocurrency market declined when the stock market did once again proves the strong correlation between the two. This correlation is firmly established and can easily be noticed during previous downtrends. The oil market is in trouble as WTI Crude Oil (USOIL) has declined below the symmetrical triangle. The EUR/USD forex pair has also run into a key trend line resistance. The Fear and Greed Index shows that as bad as things are at the moment, they could always get worse. 

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