Inflation Concerns Impact S&P 500; Cryptocurrencies Maintain Resilience
Summary:
The S&P 500 Index ended its five-week rising streak last week, falling by 0.42% following higher than anticipated inflation reports. Despite this macroeconomic data, Bitcoin's price remained stable and saw an 8% rise, topping off the week at $52,137. Meanwhile, the Grayscale Bitcoin Trust (GBTC) saw slowed outflows. Other cryptocurrencies such as Ether, BNB, XRP, Cardano, and Avalanche also demonstrated varying trends.
The S&P 500 Index saw a 0.42% drop last week, marking the end of its five-week rally. This comes after a higher-than-expected rise in the United States Consumer Price Index and Producer Price Index for January, sparking fears that the Federal Reserve may delay rate cuts. While market watchers originally predicted a rate cut in March, the hot inflation data has allayed any such expectations.
Despite this, Bitcoin's price remained unaffected, seeing a roughly 8% rise and ending the week at $52,137 - the highest weekly close since November 2020. Bitcoin traders, while facing resistance at the $52,000 mark, haven't shown any urgent desire to cash in, suggesting a long-term faith in the cryptocurrency's values.
The cryptocurrency market has seen other positive signs, including a reduction in the rate at which funds are flowing out of the Grayscale Bitcoin Trust (GBTC). Following an outflow of $5.64 billion in January, February has so far only seen an outflow of $1.37 billion.
The S&P 500 bounced back off its 20-day moving average of 4,940 on February 13. Despite this, the index faces strong resistance at the 5,048 mark. If it continues to climb and breaks above this point, the index could potentially reach the 5,200 mark.
The U.S. Dollar Index saw a premature rally on February 13, quickly encountering resistance near the 105 mark. The price dropped to the 20-day moving average (104), a critical support line. A break below this line could see the index falling to the 50-day SMA (103), attracting buyers.
Bitcoin has been holding its ground against bear-market forces at the $52,000 level. If Bitcoin breaks and maintains above this level, the cryptocurrency could rocket upwards to $60,000.
Ether surged above the immediate resistance at $2,868 on February 18, indicating a return to bullish trends. With the recent rally pushing the Relative Strength Index (RSI) above 78, a minor correction or consolidation in the near future could be on the cards.
BNB faced a pullback in its uptrend, suggesting profit-taking by short-term traders. However, the rising 20-day EMA ($330) and the RSI nearing the overbought zone show that bulls still have control over the market.
XRP, sandwiched between the Downtrend Line and the 20-day EMA, represents a tug-of-war between bullish and bearish market sentiments. If the price successfully breaks and closes above the downtrend line, it could trigger a rally to $0.67.
Cardano faced a bullish rebound, characterized by the long tail on its February 17 candlestick chart. The bullish forces are currently trying to maintain control above the immediate resistance at $0.62, potentially setting the stage for a rally to $0.68.
Finally, Avalanche faced a downturn from the $42 level on February 15, but managed to avoid dipping below the 20-day EMA. If it can manage to break past the $42 barrier, there could be a skyrocket to the $50 level.
Published At
2/19/2024 8:35:05 PM
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