Bitcoin (BTC) has closed the day above the 50 day EMA unlike Ethereum (ETH) which ended up closing below the 200 day EMA. This could be an indicator of further downside to come even though BTC/USD keeps on stalling a move to the downside. However, it keeps on revisiting the 50 day EMA and the more it keeps on testing it, the more it risks falling below it. Bitcoin (BTC) has begun the day in red and it could fall below the 50 day EMA if the price fails to recover quickly from here. The price is at a turning point and the bullish momentum keeps fading away. If we take a look at Ethereum (ETH), it is likely to breakout of a pennant on the 1H chart most likely within the next six hours. The RSI supports this move as we see an established downtrend.
If the price ends up closing to the downside, it will be a continuation of the bearish downtrend that is likely to be followed by some panic selling in the near future that could potentially drive the price down to $7,200 or lower levels. Bitcoin (BTC) is likely to find a temporary floor above the 200 day EMA although it will have to decline further from there in the weeks and months ahead. If we take a look at the EUR/USD pair, we can see that what the cryptocurrency market is doing is perfectly in line with what is happening in the forex market with the EUR/USD pair. The Euro has been in a steady downtrend. The pair did manage to climb above the 61.8% and the 38.2% fib extension level but it eventually declined below that and has now entered a strong downtrend after facing a rejection at a retest of the 61.8% fib level.
The EURO is now trading below its 21 Day EMA having already broken below the 50 Day and 200 Day EMAs. This means that the next downtrend could be a sharp one and it will be devastating for Bitcoin (BTC). We expect the pair to decline towards the remainder of the year as well as the first half of next year. During that time, BTC/USD will face a lot of bearish pressure because when EUR/USD declines, the price of Bitcoin (BTC) goes down in dollar terms as the US Dollar goes up against the Euro. This decline is going to be very meaningful for Bitcoin (BTC) and that is when we will see the price find its true bottom. The Fear and Greed Index has been relatively stable at 42 but it is at a turning point and in light of recent developments it is likely that more fear will follow and the price will decline most likely in the next six hours.