The price of Bitcoin has done exactly what we anticipated and we saw a big move towards the $9.5k mark to complete the right shoulder of the Head and Shoulders formation. BTC/USD ended up rising a little higher than that but has now declined. The larger trend remains unchanged and BTC/USD is still on the verge of a major decline below $8k from current levels. The price action looks a lot similar to the one from the previous major downtrend. We can see that the pattern of higher highs and higher lows on the daily time frame is now broken and Bitcoin is expected to enter a major downtrend.
This is all happening at a time when the S&P 500 (SPX) has just broken below a key trend line support. The symmetrical triangle in which the index had been trading in has now been broken to the downside and further downside is expected in the days and weeks ahead. Meanwhile, the EUR/USD forex pair has done the same and we expect a move to the downside in the Euro as well. As for the cryptocurrency market, previous such downtrends have triggered major declines in Bitcoin and other cryptocurrencies. There is no reason to think that this time will be any different especially when Bitcoin’s own technicals point to a major decline up ahead.
The Coronavirus situation seems to be worsening despite temporary optimism that had led to some countries lifting lockdowns for now. The World Health Organization recently said that it might never go away. Some doctors and scientists are also warning to prepare against another wave of COVID 19 which they expect to be more devastating this time. All of these factors put together leave us no reason to be bullish on Bitcoin or other cryptocurrencies at this point. The larger trend remains bearish and we need to accept it as such. Granted that there was a lot of hype around halving but it is over now. This is a time for the big players to cash out and things might happen very quickly.