Here’s Why Bitcoin And Oil Crashed Hard 

The price of oil crashed more than 30% today. This followed Friday’s meeting between OPEC+ members Saudi Arabia and Russia. They could not agree on Oil production cuts and the result of it was a major decline in the market that saw traders panicking to sell. The intent seems to have been putting pressure on the US Shale Oil industry. Saudi and Russian oil would now be undercutting each other to sell at lower prices leading to the price declining lower and lower. This created panic in the market and as we pointed out before, it was only a matter of time that this happened in the cryptocurrency market. 

The last time something like this happened was in 2014. WTI Crude Oil (USOIL) crashed hard and Bitcoin (BTC) soon followed. The end result of all that was the beginning of a major downtrend that saw Oil prices decline below $30 per barrel. This time, something similar seems to be in the making and that is why we could see a repeat of 2014 again not only in oil but also in Bitcoin. Those of you that have been following my analyses for a while would know that for almost two years now, I have been saying that we are going to see a decline like 2014 and not like 2018 in the cryptocurrency market. All of that seems to be in motion now and the market is ready to decline further. 

For now, we have seen BTC/USD find support on the 61.8% fib level. If the price consolidates above this level, we could see a potential rally higher. However, it is important to note that Bitcoin could still fall further within the descending broadening wedge. It is therefore important to be very careful trying to be long on the market just yet. The most probable scenario would be a short-lived upside here followed by further downside. 

Markets are very vulnerable at the moment. We have already seen stock futures decline. The S&P 500 (SPX) started the day in red and is expected to decline further. Meanwhile, the Coronavirus situation is not helping much and investors are now really concerned that this could lead to a recession. As for cryptocurrencies, altcoin pairs like ETH/USD would be crushed hard in a scenario like that. On the forex front, EUR/USD is still holding above the 200-day moving average but the rally seems to be over extended and we are likely to see a reversion to the mean in the days and weeks ahead.