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Cryptocurrencies are following the path of Bitcoin, and there are numerous factors affecting the price performance of BTC. These include macroeconomic developments, US stock markets, the dollar index (DXY), spot Bitcoin ETF flows, and much more. Today, to understand the situation on the macroeconomic front, we will examine BTC price predictions along with S&P 500 and DXY charts.
S&P 500 Analysis
There is a positive correlation between the US stock markets and Bitcoin prices, and both are significantly affected by macroeconomic developments. Sometimes the S&P 500 starts rallying before BTC, signaling early turnaround in risk markets, or it can act as a warning for potential downturns.
The index is in an ascending channel and confirmed the upward trend by bouncing off the formation’s support and reaching an all-time high (ATH) on March 28. Although moving averages are inclined upwards, the negative divergence in RSI suggests we might see a correction similar to what BTC is experiencing these days. Upcoming US data on Friday could increase anxiety here.
Closures below the 20-day exponential moving average (5,176) could be a red alert for risk markets. The next targeted area would be the 5,055 region. However, if the channel is breached, doors could open for a new ATH towards 5,450.
Dollar Index (DXY)
The DXY, which shows the status of the US dollar against a basket of selected currencies, should be closely monitored. In an environment where the dollar gains strength, the pressure from the Fed on risk markets tends to increase. Since interest rate cuts have not started yet and inflation data for the first two months of the year came in poor, DXY has not suffered significant losses.
RSI and upward trending moving averages here also indicate that the bulls have taken control. If buyers can overcome the barrier at 105 (with possible surprise poor data on Friday?), the index could climb to 106 and 107.
Conversely, if the data on Friday is good and DXY breaks below 105, it could slide to the 20-day EMA (104). Below that, a relaxation to 102.5 is expected. Under these conditions, a rise in crypto is anticipated.
Bitcoin (BTC)
We highlight important levels for BTC several times a day, and our attentive readers are aware of what we are experiencing. Since bulls could not maintain a presence above $71,770 and due to the negativity from ETF outflows, they have waved the white flag. The price has retreated to $64,550. If the decline deepens, we could see a drop to the 50-day SMA ($62,430).
On the other hand, if $69,000 turns back into support and we see closures above $71,770, the $73,777 level could be tested again. This would pave the way for targets of $77,000 and $80,000.
