Bitcoin is traded sideways as we expected. This could take some time, as it did the last time before the decline started. This time it should be much more devastating than the bearish pennant we see on the daily chart for BTC / USD is much larger than the previous one. The recent upward trend in the stock market was a misleading decision, identical to the one we saw just before the start of the previous downtrend. This week could end up being of no consequence with the S&P 500 (SPX) do nothing out of the ordinary.
However, major developments are expected next week. We are now at a point where the major financial markets are lining up to prepare for the next bearish trend we have discussed in recent weeks. This time, it could be the stock market that triggers the downturn in the cryptocurrency, foreign exchange and commodity markets. On the daily chart for ETH / USD, we can now spot a death cross which will be absolutely devastating if it materializes. The last time this happened, we saw a major downward trend in the cryptocurrency market. There is no reason to expect this period to be different, especially in the prevailing circumstances where the whole coronavirus epidemic has put people out of work and forced businesses to close.
The short-term outlook for the commodity market also looks bleak. WTI Crude Oil (USOIL) is preparing for the next major drop. The stock market could continue to trade sideways for the last two days of the week as the FED tries again to save the market. However, the numbers don’t lie. The graph shows that unemployment has been the lowest in a long time and we are now preparing to see it rise. The last time this happened was in 2007 and was a precursor to the 2008-2009 financial crisis. It is very likely that we will find ourselves in the 2007 part of the cycle, but this time it will be much worse.