Equities markets are witnessing aggressive selling due to increasingly bearish macroeconomic factors, and th
Equities markets are witnessing aggressive selling due to increasingly bearish macroeconomic factors, and this is adding sell pressure to Bitcoin and altcoin prices.
The World Bank has warned of a possible global recession in 2023. In a press release on Sept. 15, the bank said that the current pace of rate hikes and policy decisions is unlikely to be enough to bring inflation down to pre-pandemic levels.
Ray Dalio, the billionaire founder of Bridgewater Associates said in a blog post on Sept. 13 that if rates were to rise to about 4.5% in the United States, it would “produce about a 20 percent negative impact on equity prices.”
The negative outlook for the equity markets does not bode well for the cryptocurrency markets as both have been closely correlated in 2022.
The macroeconomic developments seem to be worrying cryptocurrency investors who sent 236,000 Bitcoin (BTC) to major cryptocurrency exchanges on Sept. 14, according to Glassnode data. The inflow was the highest since March 2020.
Let’s study the charts of the S&P 500 index, the U.S. dollar index (DXY) and the major cryptocurrencies to determine the key levels that could signal the start of a trending move.
S&P 500
The S&P 500 index (SPX) attempted a rebound off the uptrend line on Sept. 14 but the weak rebound showed a lack of urgency to defend the level. Sellers took advantage of this situation and pulled the price below the uptrend line on Sept. 15.
The level of 3,886 from where the index had bounced on Sept. 6 also failed to provide any support, indicating that traders are in a hurry to sell their positions. Usually, the breakdown from a level tends to retest it.
In this case, the price could rise to the uptrend line. If the price turns down from this level, it will suggest that bears have flipped the uptrend line into resistance. That could increase the possibility of a drop to 3,700.
The downsloping 20-day exponential moving average (EMA) (4,006) and the relative strength index below 37 suggest that bears are in command.
If the price turns up and rises above the uptrend line, it will suggest that the breakdown on Sept. 15 may have been a bear trap. That could propel the index to the downtrend line.
DXY
The DXY is in a strong uptrend. The bears tried to pull the price below the moving averages but the bulls vigorously defended the 50-day simple moving average (SMA(107) on Sept. 13.
Both moving averages are sloping up and the RSI is in the positive territory indicating advantage to buyers. The bulls will next attempt to push the price above the overhead resistance at 110.78. This is an important level to keep an eye on because if the price sustains above this level, the rally could extend to 115.
If the price turns down from the current level or the overhead resistance and breaks below the 20-day EMA (109), it will suggest a consolidation in the near term. The price could then range between 107.58 and 110.78 for a few days. A potential trend change could be signaled if bears sink the price below 107.58.
BTC/USDT
Bitcoin formed a Doji candlestick pattern on Sept. 14, indicating indecision among the bulls and the bears. The uncertainty resolved to the downside on Sept. 15 but the bears have failed to build upon this advantage. This indicates that the selling pressure reduces at lower levels.
Buyers will attempt to salvage the situation by pushing the price above the 20-day EMA ($20,529). If that happens, the BTC/USDT pair could rise to the overhead resistance at $22,799. The bears may defend this level aggressively but if bulls thrust the price above it, the pair could rally to $25,211.
Contrarily, if the price turns down from the current level or the 20-day EMA, it will suggest that the sentiment remains negative and traders are viewing rallies as a selling opportunity. That could sink the pair to the strong support at $18,510. The zone between $18,510 and $17,622 could witness aggressive buying from the bulls because the failure to defend this zone may start the next leg of the downtrend.
ETH/USDT
Ether (ETH) bounced off the support line on Sept. 14 but the joy of the bulls proved to be short-lived. The price turned down sharply from the 20-day EMA ($1,609) and plunged below the support line on Sept. 15.
The 20-day EMA has started to turn down and the RSI has slipped below 39, indicating that bears are in control. The sellers have pulled the price to $1,422 and if this support cracks, the ETH/USDT pair could drop to $1,280.
If the price turns up from the current level, the pair could recover to the moving averages, which may act as a strong resistance. The bulls will have to clear this hurdle to suggest that the selling pressure could be reducing.
BNB/USDT
The bears pulled BNB below the…
cointelegraph.com