Bitcoin (BTC) Risks Further Decline Below $8k Even As Traders Become Very Fearful 

Bitcoin (BTC) Risks Further Decline Below $8k Even As Traders Become Very Fearful 

Bitcoin (BTC) declined below $8k as the oil market plunged hard. As the price approached the 61.8% fib level, it found a temporary support which we discussed in the previous analyses on BTC/USD. That being said, the bulls have failed to gather the momentum to push the price higher. It looks quite vulnerable and the fact that it has not tested the descending broadening wedge again means that it risks another decline in the near future below the 61.8% fib level. This would put the market under a lot of pressure once again. The sentiment is already negative and there is “extreme fear” in the market according to the Fear and Greed Index. 

Even as a lot of traders are panicking, the market risks further decline. The motive here seems to be running all the stops while possible. The whales and market makers want to shake out as many retail bulls as possible. They also want to give the bears more time to enter short positions so they can be shaken out on the next potential move up. There is not denying that the outlook is bearish and the cryptocurrency market as a whole risk a major decline, it is important to realize that this does not have to happen in one go. Quite the contrary, we could expect a move to the top of the descending broadening wedge once this correction is complete. 

As for the stock market, we can see that the S&P 500 (SPX) has also not completed its move just yet. The index is trading close to the 61.8% fib level but it has not tested it yet. The RSI remains in a bear trend and so does the MACD. All of the technicals indicate that the index could decline further before seeing any near-term upside. The most probable scenario would be the index finding support on the 61.8% fib level and consolidating there before a potential move up. 

It is important to realize that there is a lot of people very eager to buy the dip. That is certainly what they have been doing since 2009 because the market has been in an uptrend and they kept buying the dips every chance they got. That seems to have worked for a lot of people for a long time to the point that it has now made them complacent. Whenever the market declines, you hear most of them saying “buy when there is blood on the streets”. That is actually a good strategy but when the market is in a free fall, we do not know where the floor is. If we have just entered a recession, then the S&P 500 (SPX) would decline a lot lower and “buying the dips” at this point would prove to be extremely premature as the risks this time are a lot more serious. 


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