Bitcoin Bulls Lose Control Before Halving

Bitcoin saw a deadly crash over the weekend. The vast majority of Bitcoin bulls were caught off-guard. We saw more than $200 million in long positions liquidated but the bulls remained hopeful expecting the $1,500 gap would be filled next week when CME Futures start trading. The week has now started in the green and as we can see on the 4H chart for BTC/USD, there is a good chance that we see a rally towards $10k again. The Ichimoku cloud and trend line support forms a confluence of support for Bitcoin to attempt a move higher from here but there is no denying that the bulls have lost control.

We could see volatility near term once again but the big picture remains unchanged. Bitcoin is still on the verge of a major downtrend and it is expected to be more brutal this time whether or not it ends up testing $10k near term. The stock market is also eyeing further downside. We saw the S&P 500 (SPX) begin the day in red after facing multiple rejections at the 61.8% fib retracement level. The probability of a decline has now increased enormously. This is going to be the trigger that is going to bring the cryptocurrency market down to new yearly lows.

For now, there is nothing on the side of Bitcoin for us to be hopeful about. Bitcoin dominance (BTC.D) has broken well above the 200-week moving average. The trend has changed and it is only a matter of time that we see a major bullish breakout in Bitcoin dominance which spells trouble for the entire cryptocurrency market as it generally means that the market is declining with Bitcoin holding its ground better compared to altcoins. Big movements can also be expected in EUR/USD which will be game changing for many markets. Cash remains king for now and despite all the criticism aimed at the FED for printing money, the US Dollar continues to see a rising demand which will only increase in the weeks and months ahead.