Ok, the stock markets are not exactly crashing, but this is the biggest bearish daily candlestick since the Brexit vote. Cryptocurrencies on the other hand, are continuing their climb as Bitcoin continues to tumble lower.  

Bitcoin doesn't look so shiny today.

Bitcoin Is Breaking the Support

As we mentioned in the previous forex update, cryptocurrencies are enjoying some crazy times as they appreciate against normal currencies. Some of them are already 20% better off, but the chances are that this entire bonanza in altcoins comes as a result of the tumbling Bitcoin.

Bitcoin canceled the hard fork SegWit2x on Wednesday which was about to be introduced. It would be difficult for miners to get used to it, from what I heard, so some argue that it was a good thing that it failed.    

On the other hand, many Bitcoin miners were in the business because they thought that they would get free Bitcoins when the hard fork would be introduced. So, there is no reason to keep doing it.

This was the dark part of the moon according to many, so they are attributing the latest tumble to this. Whatever the reason, Bitcoin is feeling heavy, as opposed to what we have been seeing recently.

The buyers are not feeling that confident anymore. It broke below the $7,000 level about an hour ago and soon after that it pierced through the support at $6930. So, the picture looks bearish for Bitcoin at the moment.         

Stocks Are Fading, but This Might Be It

Stock markets have been having difficulties in the last two days. They have given back a good chunk of their value, which feels unnerving after they have been absolutely surging in the last few months.

This started when some US congressmen commented that it would take until 2019 until the White House Tax Plan reduces the corporate taxes. Also, the tax on repatriations will likely increase to 14% from 12%.

Abe’s win in Japanese elections was one of the reasons for the latest rally in stocks. But the main reason has been the Trump Tax Plan, which the financial markets have been waiting since Trump took office. Now, the markets are disappointed that the corporate tax cut might take another year.

Stock markets are considerably lower, but the decline might have reached an end, or at least I hope so. We bought S&P yesterday as the retrace looked overstretched. But, the fall extended further and that signal got smoked.

We have another live signal on Nikkei. Nikkei was sliding pretty fast yesterday and it has been going up and down today. But the sellers couldn’t take out yesterday’s low, which is a positive sign for our Nikkei signal. Let’s hope this is the end of this move and the stock markets get back to bullish.   

Trades in Sight

Bullish Bitcoin  

1. The trend has changed on the H4 chart  
2. Support has been broken
3. The market sentiment is bearish  

The 50 SMA is doing its job well again.

I would say that fundamentals are bearish as well, considering that the hard fork was withdrawn. But, I’m not sure this is a bad thing. Although, the sentiment remains bearish and the technical indicators are bearish, too. So, I would look to sell Bitcoin at the previous support around $6,930 or perhaps at $7,000 if it retraces up there. Of course, I will observe the price action first.  

In Conclusion

Financial markets are behaving strangely today. Forex market is chopping around, stocks are still sliding, Bitcoin is tumbling, while the rest of the crypto market is still climbing. The US is off today and the economic data is very light for the remainder of the day, so I suggest that you be careful in order not to get caught in a flash spike.