Bitcoin halving turned out to be the opposite of what the consensus was hoping for but the consensus is wrong most of the time. The FOMO was priced in and as we got close to halving, the big players dumped on the retail traders. So, what could the retail traders have done? At the very least, they could have bought the rumor and sell the news. It was very unreasonable to expect BTC/USD to rally after halving and we constantly warned against a major crash. This is certainly not that “major crash” as it has yet to be seen and we are very close to it.
For now, the sentiment remains overly bearish and many analysts and traders are expecting Bitcoin to decline down to $6k. The problem with that is that too many people will once again get on the same side this time which will create another honey pot for the market makers and whales. During the recent crash, more than $200 million worth of long positions were liquidated. We now have many bearish positions stacked up that could be shaken out in the near future if the price of Bitcoin rises up to complete the right shoulder of the H&S formation that we see on the chart.
The S&P 500 (SPX) has faced multiple rejections at the 61.8% fib retracement level and is now eyeing a sharp correction. The EUR/USD forex pair is also hanging by a thread and it is only a matter of time before we see a major move in both of these markets. The near-term outlook indicates that we might see good days for the US Dollar (USD) up ahead with the Dollar Currency Index (DXY) surging to new yearly highs. As for Bitcoin and the rest of the cryptocurrency market, this year could turn out to be devastating. Now that Bitcoin dominance (BTC.D) is eyeing a massive breakout to pre-2017, we can expect carnage in the cryptocurrency market in general and altcoins in particular.