Although the week ended on a positive note on Friday, Bitcoin‘s price fell back below $37,000 due to sell-offs. Alongside this, the overall market appetite for risk weakened. November was promising, with BTC hitting new annual highs and altcoins experiencing massive rallies. So, what’s next?
S&P 500 Commentary
The S&P 500 Index (SPX) continued its rally after breaking above the downtrend line, signaling strong demand. The performance of the US stock markets not only correlates with crypto but also reflects the macroeconomic situation. Increasing optimism that the Fed’s interest rate cuts could be faster helped the stocks to rise.
If the index stays above the 20-day exponential moving average (4,448), it will be a strong signal for the continuation of the bullish sentiment. This could set the stage for a stronger break above the 4,650 level. On the flip side, losing this region could lead to a drop to the 4,346 area.
US Dollar Index Commentary
Just like the stock market performance helps us understand the macro picture, so does DXY. The Dollar Index tracks the performance of the US dollar against a basket of selected currencies. As the dollar strengthens—meaning the DXY increases—risk markets (stocks, BTC, etc.) tend to lose value. The US Dollar Index (DXY) tried to recover from 103.46 on November 21 but stopped at 104.21 the next day. Now it targets the 102.55 level.
If there are no closes above the 104.54 level, the decline could continue. Conversely, the 106 area will be targeted and fear may rise again.
Bitcoin (BTC) Commentary
The leading cryptocurrency is forming an ascending triangle with closures above $38,000. Upward sloping moving averages and the RSI in the positive zone suggest that new highs are possible. If the resistance at $38,000 can be permanently surpassed, it wouldn’t be surprising to see the price hit $40,000. Beyond that, $41,160 will be pivotal for new highs.
Those who want to invalidate the bullish movement must push the price below the ascending trend line. In that case, the price could drop to $34,800 or lower.
Disclaimer: The information in this article is not intended as investment advice. Investors should be aware of the high volatility and risk associated with cryptocurrency and should make transactions based on their own research.
- Bitcoin retests key support levels.
- S&P 500 and DXY reflect macro trends.
- Investors urged to conduct research.