Bitcoin (BTC) has declined way below the 21 day EMA as well as the 50 day EMA. This has now paved the way for further downside in the days ahead. The price has found temporary support at the 61.8% fib extension level but it is a long way from declining further. If we look at the price action in the recent past, we can see that similar declines have happened before. The price did end up declining more than 23% in one day recently and if something like that were to happen again, BTC/USD would decline towards the bottom of this descending triangle which by the way would be a lesser decline than 23%. So, that tells us that it is still possible but I don’t consider it to be very probable at this point.
If we take a look at the 4H chart for BTC/USD, we can see that it broke below a key trend line support which is now likely to be tested as resistance especially as everyone is expecting the price to fall further. As long as we don’t have a close below the 61.8% fib extension level on the daily time frame, I expect the price to move up from here to test the trend line support turned resistance. The market makers have been shaking out the bulls and bears to both sides and this time they have the opportunity to do so again when the bears are expecting the price to fall from here. They are likely to pump the price up to run their stops and to trap more bulls on the way up before the decline eventually begins. While this is a possibility that we should keep in mind, we should not forget that ultimately, the price has to break below the descending triangle and that would mark the beginning of a much more devastating decline.
If we take a look at the 4H chart for ETH/USD, we can see that it has already declined below the bear flag. The last time that happened, the price began a brutal downtrend and if it happens this time, we are going to see it is going to be a lot more devastating because not only will Ethereum (ETH) begin a downtrend but it will end up breaking below the descending triangle to crash a lot harder. There is a lot of hype around Eos (EOS) and its upcoming hard fork. If we focus on the technicals, it remains in a strong bear trend which tells us that it may not be worth chasing it just out of hype.
The S&P 500 has now closed below the 21 day EMA and the 50 day EMA just before beginning a major downtrend. The last time this happened, we saw a downtrend follow that saw the index testing the 200 day EMA and then falling systemically till it completed the correction. If the same happens this time as we expect it to, Bitcoin (BTC) and other cryptocurrencies are going to be devastated. So, despite all the hype altcoins like Eos (EOS) remain in a strong downtrend against both Bitcoin (BTC) and Eos (EOS) which means investors need to be very cautious falling for any sort of hype at this point.
Source: CryptoDaily.co.uk
Original Post: Has Bitcoin (BTC) Begun Its Downtrend?
