After a promising rally, bitcoin continued its downward journey. Despite hitting $7,500 on Tuesday, momentum wasn’t sufficient. As we noted earlier this week, bitcoin is better correlated with the mainstream markets nowadays. When the Dow Jones fell 500 points, BTC went with it.

This stage of the bigger picture has almost finished playing out, though, and a key decision for traders is at hand. Zooming out to the daily chart, we can see that BTC has been trading in a large wedge, with strong support and resistance zones. One way or another, that will be resolved within the next three weeks, and very likely far sooner (these patterns tend not to hold right to the very end).

Right now everything seems bearish, which – counter-intuitively – is actually good news, because it means sellers are running out. All the same, we’re approaching a moment that will determine whether the bear market is over and whether buyers, sellers or apathy will dictate market direction for the next phase. Some headlines from this week to give a better-nuanced picture:

India has banned regulated entities from dealing with individuals or businesses that work with digital currencies: https://www.bloombergquint.com/business/2018/04/05/rbi-bans-regulated-entities-from-dealing-with-virtual-currencies

The SEC has begun considering two ETF proposals, apparently backtracking on its earlier stance: https://www.ccn.com/sec-quietly-puts-bitcoin-etf-proposals-back-on-the-table/

Vitalik Buterin, creator of Ethereum, publicly called out Craig ‘Fake Satoshi’ Wright at a conference: https://www.ccn.com/vitalik-buterin-re-craig-wright-deconomy-2018-fraud/

Donald Trump has tweeted: ‘When you’re already $500 Billion DOWN, you can’t lose!’ Most critics believe this refers to the US trade deficit with China, but it’s also how much crypto’s market cap has fallen. Coincidence? Seems unlikely.

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