(Analysis) Bitcoin is approaching the end of its third consecutive week of declines, with the price falling from a high of $73,830.
This downturn hints at diminishing bullish momentum amid a broader shift towards risk aversion in the market.
This trend is linked to unexpected increases in U.S. inflation, which have postponed expected interest rate cuts until September 2024.
Consequently, markets are currently estimating a 46.5% likelihood of these rate adjustments occurring next year.
Sector-Wide Technical Analysis Reveals Mixed Signals
S&P 500
The S&P 500 benchmark is likely to mark its third straight week of losses, despite maintaining a long-term uptrend.
Recent actions saw it close beneath its 50-day moving average, signaling increased sell-off pressures that could challenge support levels from December 2021 at 4,820, with potential further dips approaching the 200-day moving average of 4,680.
DXY (U.S. Dollar Index)
Displaying short-term gains, the dollar faces a key resistance at 106.500.
Daily movements show the 21 and 50-day moving averages crossing, suggesting buyers are currently in control.
The index’s support is being tested at the 105.000 mark, indicating possible stabilization or reversal points.
Bitcoin (BTCUSD)
Bitcoin struggled to breach the $73,000 threshold and now faces a critical support at $61,300.
Failing to maintain this level may trigger a bearish reversal, as evidenced by the formation of lower highs and lower lows since March 2024.
Recovery hopes hinge on reclaiming the $73,000 high, with immediate supports seen at $51,000.
Additionally, a bearish crossover in the 4-hour chart’s 50 and 200-period moving averages corroborates the likelihood of further corrections, setting the stage for Fibonacci retracement levels at $56,075 and $53,880.
Bitcoin, S&P 500, and Dollar Index Navigate Uncertain Waters
Ethereum (ETHUSD)
Although Ethereum shows a positive trajectory in the medium term, recent activity initiated a bearish pivot with the price dropping below the prior low of $3,700 to a new support at $3,060.
This descent, if sustained, could challenge the 200-day moving average at $2,520.
Solana (SOLUSD)
Solana’s chart has mirrored a downtrend, breaching the 50-day moving average and testing early 2024 supports.
If the decline continues, the next significant level to watch is the 200-day average at $95.20, with resistance looming at $204.75.
The collective insights from these markets illustrate a landscape where traders are grappling with uncertainty and volatility.
As Bitcoin and major indexes like the S&P 500 show signs of pressure, currency and other cryptocurrency markets also reveal complex dynamics that could influence broader financial movements in the coming months.