Macro Hebdo update: Bitcoin and the US market on support – Rise ahead?

Bitcoin drops in volatility – Bitcoin is often criticized for being too volatile to fulfill the function of money. For the past few days, we have seen a drop in volatility with bitcoin oscillating between $19,500 and $20,500. This is a fairly rare phenomenon and usually does not last very long. Indeed, volatility should quickly return. Bitcoin no longer follows the movements of the traditional market, the correlation between these assets seems to be running out of steam. Has the traditional market marked its bottom? Is the dollar index weakening? Let’s look at this in Le Point Macro Hebdo.

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Bitcoin in slow motion

While some altcoins like Ethereum are trying to regain value against the dollar, Bitcoin is stagnating and drop in volatility :

Price of Bitcoin against the dollar (3D)

The price of bitcoin is still in a bearish momentum and he will stay brittle as long as it evolves under the bearish trendline. Also, the momentum remains bearish as long as the RSI is stuck below its bearish trendline. A few weeks ago, the RSI was once again rejected at this downward trendline. For now, bitcoin remains above the last bastion, the bracket at $19,500. From there, two scenarios are taking shape for the next few weeks:

  • Bullish : the price manages to get rid of the institutional bias (EMA 9/EMA 18) and the price joins the downward trendline at around $28,500. The course will face a dual resistance between the bearish trendline and the resistance at $28,500.
  • Bearish : the price does not rebound at the support level. In this case, buyers will find it difficult to maintain the low at $17,600. A scenario that would be very harm to altcoins trying to go up again.

Buyers need to defend current levels to avoid a new low. The situation remains delicate, but Bitcoin retains support for the moment.

Risk off: The dollar builds a top? Gold on weekly support

The dollar could change momentum

The dollar index continues to rise. He even made a new high at 110 dots a few days ago. The euro, for its part, is undergoing a freefall against the dollar. The euro lost 20% against the dollar since January 2022.

It is often repeated in Le Point Macro Hebdo, but with a strong dollar, these are risky assets that cannot fully express themselves. The dollar index could score a high :

The dollar index could mark a top in the coming weeks.
Dollar index chart (3D)

Although it is still too early to confirm a best local on the dollar index, the dollar is struggling to cross the resistance at 109 points. For the moment, the trend remains bullish as evidenced by course development (Dow’s Theory) as well as institutional bias. The two EMAs make it possible to bounce the price at each retracement.

We can imagine the script following, which would mark the end of the rise of the dollar. The course takes place dismiss and go under 108 dots. Then, the price attempts a new breakthrough and fails on the resistance. This is the scenario materialized by the red arrow. A scenario which is to be considered, because the momentum runs out of steam and diverges. The RSI could be rejected at the level of the bearish trendline in the coming days.

The storyline is very optimistic for risky assets. It would require, initially, a strong rejection under 109 dots.

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Gold is on the support at $1,690

We were talking about it last week, the buyers absolutely must defend the support on gold at $1,690 :

Gold is again at the weekly support level.
Price of gold against the dollar (3D)

The gold is in a tidy weekly. It recently got rejected at the bearish trendline at $1,800. Buyers defended the support, now it’s time to break $1,800 to mark a double bottom and restart the bullish momentum within this range. On the other hand, if the buyers fail and the price settles below the weekly support, gold could change primary momentum. The primary momentum of gold is bullishbut this could be threatened if the buyers do not defend the bottom of the range.

The US market is on support, the price positioned on the rise?

S&P 500 rebounds to $3,900?

The S&P 500 broke the bracket at $4,150 and quickly joined the next one at $3,900 :

The S&P 500 is at weekly support.
Price of the S&P 500 against the dollar (3D)

The two arrows represent the two scenarios considered two weeks ago. Last week, we were considering a return to the level of the bracket at $3,900. The price returned to the support faster than expected, but the top was made in “ v-top” , a structure brittle. There is a good chance of at least recovering the S&P 500 at $4,150 to break the bearish trendline or to change momentum.

Buyers must defend the support here. As long as the price moves below the bearish trendline, the price will remain brittle. On the other hand, the momentum has broken the bearish trendline, and could soon allow a bounce.

NASDAQ on a potential bounce to $12,000

Like its colleague the S&P 500, the NASDAQ evolves at the level of the bracket at $12,000. Buyers could show up here to start bullish again:

The NASDAQ is coming to the support level at $12,000.
NASDAQ price against the dollar (3D)

The NASDAQ was also rejected at the level of the bearish trendline. The price failed to rebound at the level of the bracket at $12,700buyers are going to have to defend the next to $12,000. Here again, the price remains fragile as long as the price evolves below the bearish trendline.

The momentum is always weak. The RSI develops bullish structures, but the bearish trendline rejects it again.

Bitcoin is falling in volatility, but this situation should not last forever. Sooner or later, the king of cryptocurrencies will regain volatility. As long as Bitcoin remains in this situation, altcoins will benefit. The dollar remains bullish, but the momentum diverges and the price could fall below the resistance. A local top on the dollar index would be excellent news for risky assets which cannot, for the moment, fully express themselves. Bitcoin, S&P 500 and NASDAQ are at important supports, buyers need to show up here if they want to stem the downtrend.

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