What level will the reversal occur at, and is there a bottom for Bitcoin if U.S. indices dive?
This year, the crypto market has shown exceptional volatility: many altcoins have delivered hundreds of percent in returns, allowing us to lock in profits just before they fell by 50-70% from their annual highs! But is it really that dire?
The movement of altcoins largely depends on BTC, which we’ll discuss here. Bitcoin’s dynamics are closely correlated with the SP500 index. Therefore, it’s crucial to assess the SP500’s performance first, as this index represents a far larger market volume than BTC_USDT.
Regarding the SP500, I believe the potential for a downturn is currently limited because:
- The U.S. elections are approaching, and the market won’t be allowed to drop significantly.
- The buyback programs for major stocks are now in full swing. As you know, buybacks are the main driving force behind U.S. indices (you can track buyback dynamics with the DRB ticker).
🛠️ Technical Analysis
On the technical side, BTC has been in a broad sideways trend (54-70k$) for over 150 days. According to external indicators, whales are accumulating BTC.
Let’s look at the RSI across different time frames:
- H4 (34): Close to strong oversold conditions, a short-term bounce to 69k$ is likely.
- D1 (49): Neutral, with the sideways trend likely to continue in the coming months.
- W1 (55): Neutral, with the weekly chart showing consolidation in the sideways trend, which supports medium-term growth.
- M1 (65): Close to strong overbought conditions, the longest time frame is cooling down slowly, suggesting the continuation of the sideways trend.
🤷♂️ So What’s the Verdict?
For U.S. indices, expect a sideways trend until the elections. However, September might bring surprises… A significant drop could occur, but it will be controlled. Around the same time, the Fed (U.S. Central Bank) is forecasting its first rate cut, which historically has been a negative factor.
Therefore, I anticipate that BTC’s sideways trend will break downward, with the most pessimistic scenario predicting a drop to 46k-52k$. After this, BTC is expected to enter a new growth cycle, potentially reaching 100k$ and beyond!
📈 In the coming months, focus on accumulating fundamentally strong assets: BTC and GOLD. These will likely deliver the highest returns in 2024.
