How is the cryptoworld affected by the traditional markets?
Yesterday, we have looked at the situation at FED and what does that mean not only for inflation, but also for upcoming stimulus or indices. As one can imagine, such a big news have also an effect on cryptocurrencies. What effect one might ask? Well that you can see below.
Reaction of Bitcoin
At the first glance, nothing has changed for Bitcoin in past couple of days. We are still sitting below major resistances and above major supports. This simply means that we are still waiting patiently for major breakout to either direction. At this moment in time it is very hard to predict the direction of the movement, however, since we should still be in a bull market, the upward movement seem to be more probable.
That is also seen by the fact that Bitcoin has mostly tried to break the resistances, not the supports. Yet, all the tries has been rejected so far. You can see that in the chart below in the yellow circle. Coincidentally, this was also the time when we saw major downward movements also for indices and equities.
What to expect now?
Even if the situation might look unpleasant, I still believe that Bitcoin is looking bullish. This is for instance due to the fact that major indices have fallen sharply and some even broken important structures and patterns, but Bitcoin stayed above the main supports, still consolidating above the main trendline. Rule of a thumb also says that if something stays below the resistance for a long time, there is higher probability of an upward movement and a break of the given resistance.
Thus I expect Bitcoin to move upward in the next 7 days. The decision might even come as soon as weekend time. And since traditional markets are closed during weekends, Bitcoin can move without any other market affecting it, which might be good for the main cryptocurrency, since it would have the „freedom of movement.“