Bitcoin and US equity markets are looking to recover, but selling into overhead resistance may continue to weigh on upside momentum.
Bitcoin
BTC
tickers down
$22,159
and US stock markets are looking to start the week on a positive note, but some analysts are skeptical about the markets’ short-term outlook. According to Bloomberg Intelligence Senior Macro Strategist Mike McGlone, Bitcoin will face significant resistance at $25,000. McGlone believes “it may be some time before buy-and-hold types get the upper hand.”
It also looks like Bitcoin whales, unique entities that have 1,000 BTC or more, are also unsure about the recovery in the crypto markets. According to Glassnode, the number of Bitcoin whales has dropped to 1,663, well below the peak of 2,161 in February 2021.
It is difficult to get hold of any market. Therefore, traders should try to build a portfolio when they believe that the downturn has ended and a base has begun.
Instead of buying the entire amount at once, they could build a portfolio gradually with the aim of completing the purchases before the asset gains momentum and goes higher.
Could Strength in Equity Markets Make Bitcoin and Altcoins Higher? Let’s study the charts to find out.
SPX
The S&P 500 ( SPX ) fell below the 20-day exponential moving average, or EMA (4,046), on February 17, which accelerated the selling and pulled the price to the uptrend line. Although the bears pulled the price below the uptrend line on February 24, the lower levels attracted buying as seen by the long tail of the day’s candlestick. That helped the index close close to the uptrend line.
The bulls may have an uphill task, as the bears are likely to sell on any support rallies near the 20-day EMA, as seen by the long wick on the February 27 candlestick. If the price breaks down from the 20-day EMA, it will indicate that the outlook is bearish and traders are selling on smaller rallies. Closing below the uptrend line could reduce the doors to 3,764.
If the bulls want to save the day, they will have to push the price above the 20-day EMA. If they do, it will indicate that the break below the uptrend line may have been a bear trap. The index could then try to lift the overhead resistance of 4,200.
DXY
The bulls managed to retest the breakout level from the wedge pattern on February 20, which started a stronger relief in the US dollar index (DXY).
The index reached the 38.2% Fibonacci level of 105.52. This level of effort to see the bears could stop the recovery. If the sellers want to maintain their holding, they will have to lower the price below the moving averages.
On the other hand, if the bulls want to strengthen their position, they will have to push the price above 105.52. If they succeed in doing so, the index could extend its recovery to the 50% level at 106.98 and then to the 61.8% level at 108.43.
BTC / USDT
Bitcoin
BTC
tickers down
$22,159
it bounced off the $22,800 support on February 25 and climbed above the 20-day EMA ($23,417) on February 26. This suggests that lower levels are attracting buyers.
However, the bears may not give up easily. They will try to drag the price below the 20-day EMA and challenge the 50-day simple moving average, or SMA ($22,433). If this level breaks, the BTC/USDT pair could fall to the next major support at $21,480.
Alternatively, if the price bounces back to $22,800, it will indicate that buyers are aggressively defending this level. That could indicate range action between $22,800 and $25,250 in a few days.
ETH/USDT
Ether
ETH
tickers down
$1,561
bounced off the 50-day SMA ($1,587) on February 25, indicating that bulls are aggressively defending this level. The 20-day EMA ($1,626) is bearish and the RSI is just above the midpoint, indicating a balance between supply and demand.
This balance will turn in favor of the bulls if they confirm and close the price above $1,680. The ETH/USDT pair will then try to climb above the $1,800 resistance and begin its journey towards the psychological $2,000 level.
Alternatively, if the price breaks down from the overhead resistance again, it will indicate that the bears are not ready to give up. That could raise the possibility of a break below the 50-day SMA. The pair may then fall to $1,460 and later to $1,352
