The 10-year Treasury yield in the United States rose to its highest level since 2008. Although this type of rally is usually negative for risky assets
The 10-year Treasury yield in the United States rose to its highest level since 2008. Although this type of rally is usually negative for risky assets, the U.S. stock markets recovered ground after the Wall Street Journal reported that some officials of the Federal Reserve were concerned about the pace of the rate hikes and the risks of over-tightening.
While it is widely accepted that the U.S. will enter a recession, a debate rages on about how long it could last. On that, Tesla CEO Elon Musk recently said on Twitter that the recession could last “probably until spring of ‘24,” and added that it would be nice to spend “one year without a horrible global event.”
Bitcoin’s (BTC) price has witnessed a massive drop from its all-time high but its hash rate remains strong. This has increased Bitcoin’s discount relative to its hash rate in October to its highest since the first quarter of 2020, according to Bloomberg Intelligence senior commodity strategist Mike McGlone. The previous instance of the huge discount was followed by a massive rally that lasted till 2021. McGlone believes the same could happen again this time and Bitcoin may outperform most major assets.
Let’s study the charts of the S&P 500 index (SPX), the U.S. dollar index (DXY) and the major cryptocurrencies to spot any reversals.
SPX
The S&P 500 index rose above the 20-day exponential moving average (EMA) ($3,702) on Oct. 18 but the bulls could not build upon this strength and challenge the downtrend line. This suggests that the bears have not given up and are active at higher levels.
The 20-day EMA is trying to flatten out and the relative strength index is above 46, suggesting a possible range-bound action in the near term. Buyers are likely to defend the zone between $3,568 and $3,491 while the bears will try to stall the recovery in the $3,762 to $3,800 zone.
If the price turns up and breaks above $3,800, it will break the lower lows and lower highs pattern. The index could then rise to the 50-day simple moving average (SMA) ($3,885).
The bears will regain their hold if they manage to sink the price below $3,491. That could start the next leg of the down move to $3,325.
DXY
The U.S. dollar index remains in a strong uptrend as the bulls are not allowing the price to break below the 20-day EMA (112).
The bulls will have to propel the price above the $113.92 to $114.77 zone to resume the uptrend. Buyers tried to do that on Oct. 21 but the long wick on the day’s candlestick shows that bears are aggressively defending the overhead zone.
The sellers will attempt to gain the upper hand in the near term by pulling the price below the 20-day EMA. If they succeed, the index could sink to $110. Buyers are likely to defend this level and a bounce off it could keep the index range-bound between $110 and $114.77 for some time.
On the downside, a break and close below the uptrend line could point to a trend change. Alternatively, a rally above $114.77 could indicate the start of the next leg of the uptrend to $117.14.
BTC/USDT
Bitcoin bounced off the nearest support at $18,843 on Oct. 20 but the bulls could not overcome the obstacle at the 20-day EMA ($19,318). This suggests that the bears want to further cement their hold.
If the price slips and sustains below $18,843, the BTC/USDT pair could drop to $18,125. The bulls are expected to defend the zone between $18,125 and $17,622 vigorously because if they fail to do that, the pair could resume its downtrend. The next stop on the downside could be $15,750.
The long tail on the Oct. 21 candlestick shows that buyers purchased the dip below $18,843. They will try to propel the price above the moving averages. A break above the 50-day SMA ($19,616) could clear the path for a possible rally to $20,500. This is an important level to keep an eye on because a break above it could signal the start of a strong recovery to $22,800 and then $25,211.
ETH/USDT
Ether (ETH) is struggling to rise above the 20-day EMA ($1,313) but a minor positive is that the bulls have not allowed the price to sustain below the immediate support at $1,263.
If the price turns up from the current level and breaks above the 20-day EMA, the ETH/USDT pair could rally to the downtrend line of the descending channel. Buyers will have to thrust the price above this resistance to indicate the start of a new up-move.
On the contrary, if the price continues lower and breaks below the $1,220 to $1,190 support zone, the selling could intensify and the pair could drop to the psychological level at $1,000 and then to the support line of the channel.
BNB/USDT
BNB (BNB) has been trading below both the moving averages and the bears are trying to sink the price to the support of the range at $258.
The gradually…
cointelegraph.com