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Bitcoin (BTC) sank to intraday support on Aug. 16 as concerns emerged over the fate of United States stock markets.
U.S. stocks face stiff resistance
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $23,685 on Bitstamp, nearing lows from Aug. 12.
After an eerily calm 24 hours, downside set in at the day’s Wall Street open as previous highs in excess of $25,000 looked increasingly like a double top.
#BTC is dipping right now as part of a potential technical retest of previous resistance$BTC #Crypto #Bitcoin https://t.co/quL4gaM2nG pic.twitter.com/zrqzIbCvp2
— Rekt Capital (@rektcapital) August 16, 2022
Analyzing the potential outcomes, a typically conservative Il Capo of Crypto warned that upside was now highly unlikely given Bitcoin’s inability to break out.
“Two options, both bearish,” he began a fresh Twitter update on the day by saying.
“1) Up to 25400–25500 and then reversal of this medium tf bullish trend, straight to new lows. 2) Straight to new lows from here. Bearish confirmations: below 23500 and below 22500. Bullish continuation: consolidation above 26k.”
The argument that BTC/USD would ultimately fail to crack resistance was strengthened by the view that U.S. equities were coming up against long-term ceilings of their own.
SPX hitting a long-term level here
Could be some profit taking which is naturally going to impact $BTC and $ETH price with potential pullback pic.twitter.com/kLUgbtfz7d
— Rager (@Rager) August 16, 2022
In his own analysis, Jurrien Timmer, director of global macro at asset manager Fidelity Investments, additionally flagged a large proportion of S&P 500 stocks trading above their 50-day moving averages.
“The percentage of stocks in the S&P 500 trading above their 50-day moving average—88%—is stunning,” he commented.
“Does this signal enough positive momentum to indicate that a new cyclical bull market is underway, or is this merely a bear market rally that is now at an overbought extreme?”
A subsequent post added that many stocks had a relative strength index (RSI) of 70 or more, something Timmer said spoke to the “momentum” behind the current rally.
Timothy Peterson, investment manager at Cane Island Alternative Advisors, meanwhile had an equally unappealing long-term prognosis for the S&P 500.
The expected return for US equity over the next 10 years is 0: the S&P 500 will be ~4,000 in 2032. #Inflation-adjusted, #stocks will lose ~30% of their purchasing power. Oh, and this is a completely different metric than what was posted before.https://t.co/Mz09UVIzT2 pic.twitter.com/L0aOWxz1F3
— Timothy Peterson (@nsquaredmacro) August 15, 2022
The index was down 0.3% on the day at the time of writing, while the Nasdaq Composite Index traded down 1%.
DOG steals the show on altcoins
On altcoins, it was Dogecoin (DOGE) leading the gains amid an otherwise flat top 10 cryptocurrencies by market cap.
Related: Traders flinch after Ethereum price rejects at $2,000
DOGE/USD passed $0.09 for the first time since May 18 on the day, marking gains of 86.5% versus the pair’s recent macro bottom in mid-June.
By contrast, Ether (ETH) was unmoved over the past 24 hours, nonetheless trading under $1,900.
James Stanley, senior strategist at trading firm DailyFX, was nonetheless bullish on ETH/USD versus its own June lows, placing support at $1,818.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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