Amid S&P 500 Drop, Bitcoin Shows Resilience; Altcoins Await Bullish Uptick
Summary:
Last week saw the S&P 500 index drop by 3.05%, while Bitcoin only fell by 1.1%, indicating its strength in the face of inflation fears and potential interest rate cuts by the U.S. Federal Reserve. Experts predict fluctuations in Bitcoin's value in the coming days as the 'bulls' and 'bears' compete for control. Other cryptocurrencies, including Ether, BNB and SOL, are also showing signs of further market activity.
Last week, the S&P 500 index dropped by 3.05%, as fears of fewer interest rate reductions by the U.S. Federal Reserve heightened due to soaring inflation. Bitcoin, by contrast, only suffered a minor 1.1% decline, indicating a stronger performance. As stated by Charles Edwards, founder of Capriole Investments, Bitcoin's value is primed not only by market dynamics but also by its electrical mining cost, currently at about $77,400 per block, according to a recent X post. This figure is seldom exceeded by Bitcoin's price more than a few days every four years, suggesting a high probability of Bitcoin being significantly undervalued.
In the coming days, Bitcoin's value is set to fluctuate as the bulls and bears vie for command. If Bitcoin retains its current momentum, other alternative coins might regain the attentions of investors eager to capitalize on upswings. Key resistance and support levels in Bitcoin and altcoins are crucially important to monitor during this tug of war scenario.
The S&P 500's recent downslope indicates investors are scrambling to sell. A bearish curve in moving averages and a near-oversold relative strength index implies bearish dominance. The index may momentarily rebound from a mild support at 4,920. If it drops from the 20-day exponential moving average at 5,104, a further decline to 4,821 is likely, corresponding to the 38.2% Fibonacci retracement level. However, if it successfully crosses the 20-day EMA limit, then the rise could continue up to 5,225.
Meanwhile, the U.S. Dollar Index has surged past the 105 resistance mark, completing an ascending triangle pattern. With the bulls leading the charge, the path is open for a further advance towards the next resistance of 108. That level might see violent clashes between bulls and bears. A sharp plunge from 108 would hint at the bears guarding their defenses, pushing the index down to 105. A broken support of 105 could signal a bull trap and result in a subsequent spiral towards the uptrend line.
Bitcoin's recovery against the bearish pressure seems promising despite defense mechanisms at the 20-day EMA. A rising, static 20-day EMA and an RSI near the middle suggest declining selling pressure. If indeed the price breaches the 50-day SMA barrier, a surge to $73,777 could follow. However, should the bears regain command by pulling the price lower than $60,775, a deeper correction to $54,298 might be triggered.
In the case of Ether, a bounce to the 20-day EMA indicates a hopeful bull market. But, the equilibrium between supply and demand might be affected if it reverses from the 20-day EMA, slipping to $3,056. Loss of this support might push Ether down to $2,850. Yet, if it breaks past the 20-day EMA, the pair might scale the 50-day SMA to $3,679, signaling a potential end to the correction.
BNB has surpassed the 20-day EMA barrier, making a run for the overhead resistance at $635. This resistance may stir stiff competition between the bulls and bears. A victory for the bulls could trigger a surge to $692 and even potentially $775. Conversely, a strong rejection at this resistance could see the BNB pair trapped between $495 and $635.
Lastly, if SOL reverses at the moving averages, then the market sentiment is likely bearish, and traders are probably capitalizing on rallies. A breach below the robust support of $126 might set SOL on a path for $100. However, should SOL leap over the moving averages, this could indicate that the bulls are regaining command, paving the way for a run to $205.
Please note: This information is not intended as investment advice or a recommendation. Trading and investing carry risks, and readers should conduct their due diligence before making a decision.
Published At
4/22/2024 9:35:00 PM
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