Bitcoin Crash Continues - What Is Going On?

#bitcoin #crypto #cryptocurrencies
The Bitcoin crash continues. Here’s what you need to know. Step by step.

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Here’s a breakdown of what is going on with Bitcoin and Crypto. Bitcoin has recently Weekly closed above the 200 Weekly Exponential Moving Average (a long-term gauge of investor sentiment) which was a positive sign, but the downside has continued since then. Now it is a question of whether this 200 WEMA is now a resistance, while before it was serving as a support. If it turns into a resistance, further downside for BTC could be expected.

The most interesting thing in term’s of BTCUSD price action is that it has retraced towards the top of the ranging period, the accumulation zone from the previous cycle where $4150 was breached to see new Yearly Highs for Bitcoin. This level was a resistance on April 1st 2019 and now it is figuring as a support. It is also confluent with the uptrending trend line that has spanned a few years. This is the region I will look for Bitcoin to hold.

The Fear and Greed Index is at extremely fearful levels, levels we have rarely seen before but have nonetheless seen in the past. And though extreme fear tends to precede reversals in Bitcoin’s price action, it is important to bear in mind the context of when this extreme fear is achieved. Before, we saw a bullish context whereby Bitcoin visited these fearful levels around February 2019 before Bitcoin rallied exponentially to the upside. Context is important because now we are experiencing a Black Swan event in the markets where the coronavirus is halting the global economy and catalysing fears of a recession.

It’s important to observe the context of the coronavirus growth rate curves across different countries rather than focus on technical analysis. In times of extreme volatility and unprecedented circumstances, technical analysis doesn’t carry much weight as do other things like flattening the growth curve for the virus worldwide. Market psychology can be easily charted via TA but if the psychology is massively extreme, then normal TA cannot account for that.

Altcoins continue to be strongly correlated to Bitcoin’s price as we’ve seen this drop. This is understandable as Altcoins and Bitcoin will drop together amidst panic selling. But on a macro scale, Altcoins look bullish, as if having broken out from an Ascending Triangle, and now pulling back for a retest attempt. Altcoin Dominance is important to measuring the macro health of Altcoins, and though Altcoin valuations are plummeting, Altcoins don’t look terrible on a longer-term timeframe. However, we will continue to see bearishness in the crypto space as long as the coronavirus persists.

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