Bitcoin (BTC) has done practically nothing for the past few days. It has been trading sideways to the surprise of most bulls who expect it to rocket before the Bakkt launch. So far, nothing of the sort has happened and Bakkt has proved to be a nonevent for the cryptocurrency market. The symmetrical triangle that a lot of people have been counting on has finally been broken to the downside and I think it is time the bulls accept that. BTC/USD has now declined into the descending triangle but that does not mean that we have to see break below it right away. We might see some sideways movemennt as indicated by the RSI. It could continue to trade within that rectangle for a while before it breaks down.
The current correction would take longe than the one in 2014 because this time the market cycle is a lot longer and as more money enters a market it is only reasoanble to think that it is going to take more time for that money to go out of the market. Bakkt had an unsuccessful debut with very low volume and no matter how journalists or cryptocurrency enthusiasts try to spin it, the fact remains that there is a lack of demand for Bitcoin (BTC) at the moment and that is why Bakkt has not led to the kind of rally that most bulls expected. We don’t know if there is enough demand for Bitcoin (BTC) at the moment and we do not how that is going to change in the months ahead so it would be premature to say that Bakkt will have any substantial effect in the months ahead.
Some in the cryptocurrency space are still talking about beating Wall Street to the game without realizing that it is not about Wall Street; it is about whales and instiutional investors that could be anywhere not just Wall Street. This includes the billionaires and whales in China, Korea and Japan that have been early investors in Bitcoin (BTC) as well as Bitcoin mining and they still call the shots and determine the direction of the price for the most part. So, even if retail investors have beaten Wall Street to the game which I doubt, we can still not deny that big investors in China have beaten everyone to the game.
The price action on ETH/USD shows that it stopped declining as it hit the 50 EMA on the 4H chart. It broke uwpards to break past the falling wedge but failed to rally from there. If we zoom out, we can see that the inevtiable has to happen sooner or later and ETH/USD which is now trading at the top of the descending channel has to decline within that channel sooner or later. It has already broken below a key support on the RSI as well. The daily chart for S&P 500 (SPX) shows that there is still room for the index to top out. Similarly, two leading indicators for Bitcoin (BTC) i.e. Gold (XAU/USD) and Litecoin (LTC/USD) have yet to give us the greenlight to short sell. That being said, the potential downside is much bigger than the potential upside and buying Bitcoin (BTC) or altcoins at this point is not a risk any reasonable investor would take.