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Bitcoin (BTC) has just closed the day above the 21 Day EMA. In our last analysis on BTC/USD, we mentioned how this could be an opportunity for the bulls to save the price. Now, this does not mean that we might see a rally to a new yearly high from here but it does mean that the price could trade sideways or stall a move to the downside for now. That being said, the price could as easily decline below the 21 Day EMA as it has already begun the day in red. However, if the bulls want to save the price they can at this point before it breaks the parabolic uptrend. We do not think that the price can go up much higher from here because if we take a look at the daily chart, we can see that it has topped out in the same manner that it did in December, 2017.
We saw the price form two tops back then which were followed by a sharp decline that was then followed by a gradual downtrend. We expect the same to happen this time. The first sharp decline is likely to be towards the $7,000 level. It will initially find support on the 61.8% fib retracement level and then decline to the 200 Day EMA. This might be followed by a short term relief rally but eventually we see the price declining a lot harder to its true bottom. If we take a look at Bitcoin dominance, we can see that it has been on a continued rise while altcoin dominance has continued to fall. This is not something new as we saw this during the previous market cycle just before the beginning of a strong downtrend.