Bitcoin (BTC) has continued to rise slightly over the last week, while the S&P 500 has risen sharply over the same period. Both are climbing back to highs as the U.S. economy falters. Can this continue?
U.S. stock market continues to rally
It might be said that the S&P 500, the premier indicator of market sentiment in the United States, could just be towards the end of a relief rally that had to happen, given the huge fall that wiped off 1,300 points from the index from mid-February through to early April this year.
Rate cuts, which could really help to stimulate the economy, still do not appear to be on the table, despite President Trump pressuring Fed Chairman Powell to start making them. The market is backing Powell’s obduracy over Trump’s powers of persuasion, as the CME Fedwatch Tool currently forecasts a 92.3% chance that rates will remain as they are.
Forward-looking market could propel S&P 500 back to 6000 points
Source: TradingView
A W pattern in the S&P chart is still playing out. If it continues to do so, the measured move would put the index back above 6,000 points, and not that far from a potential reentry back into the ascending channel. Current news certainly does not forecast such an occurrence, but it must be remembered that markets are forward-looking, and that future interest rate cuts, and positive trade deals may start to happen over the coming weeks and months, and therefore the market is beginning to price this in.
Bullish ascending triangle for $BTC in short-term time frame
Source: TradingView
Looking at $BTC in the short-term time frame it can be seen that the price action is forming an ascending triangle pattern. If this is indeed the case, this is very bullish. The majority of these patterns will end with the price forcing its way out of the triangle to the upside. The measured move for this triangle could take the price to $99,000.
Wedge breakout to $99,000
Source: TradingView
Moving out into the daily time frame it can be seen that the price action, since surging out of the previous bull flag, became a descending wedge. Like the bull flag, this is a continuation pattern. Therefore, the breakout to the upside was to be expected.
It can be noted that the price action over the last few days has been to attempt to consolidate above the $94,300 resistance. If this can be achieved, the next big target is at $99,000.
Current resistance has huge importance
Source: TradingView
Zooming right out into the weekly time frame one should note the huge importance of the current resistance level. If this can be surpassed, the price could begin to accelerate, although there is still a range of resistance to break through that stretches up to the $99,000 level.
The previous huge surge that took the price out of the bull flag was unencumbered by any resistance, so perhaps the real acceleration this time may not take place until the price gets above the last main resistance level at $104,000.
At the bottom of the chart, the RSI is showing that the indicator has crossed upwards. This also bodes well for upside price action.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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