Bitcoin (BTC) crashed hard in the past 24 hours but the bulls are still not ready to give up. There is a fight for control going on that we see can spot more closely on lower time frames. If we take a look at the 5 min chart for BTC/USD, we can see that the price has repeatedly been breaking out bear flags. It is now on the verge of declining below another bear flag that would pave the way for further decline. The price is not in a position to go even towards the top of the bear flag. If we take a look at the Ethereum (ETH) chart on the daily time frame, the next move becomes clearer. The price tested the trend line resistance previously but it ended up shooting past it. We said back then that there was a strong probability that the price might decline back into the descending triangle and that has happened now. 

Short term price action can be misleading which is why it is important to stay focused on the big picture. This is why it is important to remain focused on what is happening on larger time frames. If we want to take a look at targets for Ethereum (ETH), it could fall down to $144 from here which would coincide with the 61.8% fib extension level as the price has already faced a strong rejection at the 38.2% fib extension level. If we take a look at what is happening in major markets and focus on the EUR/USD in particular, we can see that since November, 2018 it has practically been trading sideways in a boring manner. That move is expected to come to fruition soon and when that happens it will drag down the cryptocurrency market with it.

The S&P 500 (SPX) has once again closed below the 50 day EMA. This is an indicator of further downside to follow in the stock market. The last time this happened, Bitcoin (BTC) and the rest of the cryptocurrency market had a strong reaction to it and we saw the price crash below $6,000. If we zoom out on the S&P 500 (SPX) we can see that it has been losing its bullish momentum and after each bullish advance the rise has become less steep. That being said, I think we are a long way from the next recession just yet. The stock market might complete a short term correction but it still has plenty of room to rally. The Fear and Greed Index is currently at 5, something we have not seen in a long time. As contrarians, we would be tempted to buy at current levels expecting a move to the upside when everyone is scared but let us not lose sight of the big picture. Even though the price could rally higher from here on shorter time frames, let us not forget that it is poised for a major decline long term and we are not going to see a bullish cycle until that happens.

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