Throughout 2023, the crypto market showed growing dynamics and completely lost its connection to stock market indices. Such a disconnect is an anomaly and cannot last long. Let's now see how things are going on the US stock market:
While FOMO reigns in the crypto market and many projects are shooting at hundreds of percent. The planet's major stock indices began to fall. We would like to remind you that fundamentally we must fall like stones. Technically, the crypto market is in a bull market and now we see the strength of the crypto market compared to the US stock market. Now we will look at the charts of key indicators and indices of the US market. With their help, we will be able to understand how much fuel is left for growth in the crypto market.
💎 SP500. The main index of the planet went down after reaching 4195 points. The index is now actively trading along the support block around 3950 points. It is important for the index to stay above this level in order to confirm the transition of the stock market to the bullish stage from the point of view of technical analysis. As long as we are above 3950 points, we will consider the market as having entered a bullish stage. Considering that the indicators are in the neutral zone, our downward power reserve remains very high.
💸 DXY. In general, the index is fully prepared for another wave of strengthening, which should lead to a fall in the markets. Technically, the dollar index, after strong strengthening in 2022, began to weaken. Now we have a rollback to 0.5 Fibo, thereby we have completely corrected the growth of the dollar index. That is, technically, everything is ready for a new cycle of dollar strengthening, which is now happening. The most interesting thing is that when the dollar strengthens, all markets begin to fall, as liquidity goes into the currency, not into assets. And when the dollar index falls, assets begin to grow, which is what we have seen in the crypto market since the beginning of the year. The crypto market is growing provided that the dollar index is falling.
🧾 10-year bonds. This asset is one of the most important reliable instruments. A 10-year bond is a US debt security with a maturity of 10 years. The yield on a 10-year bond is the interest rate the issuer pays to the bondholder. It is usually higher than short-term bonds because investors demand a higher return for investing their money for a longer period. Typically, a rise in 10-year interest rates is a bad sign and indicates a withdrawal of liquidity from the markets.
🥇 Gold. Gold has been rising virtually to this day since November 2022. Now we see a pullback in gold, and so far the price is not going to resume growth. If you look closely, then in fact this asset has been trading sideways for 2 whole years.
✅ The main indicator of an imminent collapse. In investor circles, there is one condition, under which the market can be expected to go down:
1. Sharp rise in DXY
2. Strong drop in gold
3. Increase in profitability of 10 years
In fact, we are dealing with all three points, but it is still only in its infancy. Now it is important to monitor the SP500 index, or more precisely its reaction to 3950.
💰 Back to cryptocurrencies
If the news background related to cryptocurrencies is mainly positive and the negative is not even reflected in the price, then on-chain metrics continue to point to sales from the largest players and active purchases from small players.
📈 Technical analysis of Bitcoin. First, let's look at a chart with monthly candles. As you can see on the chart, the price has left the Bullish Wedge upward pattern and the price has fully recovered the entire growth potential. Volumes have continued to grow over the past six months. The price was unable to break even by 1 point the long-term moving average MA200w and the downward trend of 2021 (red line on the chart). Now the price is forming a bearish candlestick pattern Evening Star Doji If the month closes +- in the same candlestick formation as we now see on the chart, then next month we can safely expect the market to fall. Therefore, it is better to stay away for the next 2 days and wait until the month closes.
🔍 On the daily timeframe, the price continues to trade inside the local ascending channel. The price has hit a key resistance block and cannot break through it. It is clear from the volumes that the seller is now dominating the market and the buyers are already exhausted. Also, a huge bear dive that needs to be unloaded is very noticeable. The growth potential from current levels remains very low, so it is worth considering the option of selling part of the portfolio at current levels. Now there is nothing stopping Bitcoin from making a correction up to $19,800, and from these marks it will be possible to conduct analytics and find out whether we remain in a bullish market or return back to a bearish market.
❗️The post is not an investment recommendation
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