US stocks rally could propel Bitcoin to new highs, analyst says

After consolidating the best monthly close since October 2021 on Sundayor bitcoin (BTC) opened August with a fall. In fact, the biggest cryptocurrency in the market has been running in the red from or weekend.

However, according to analyst Diego Consimo, founder of Crypto Investorthis is a natural and healthy correction before BTC price can rebound to new local highs.

In an exclusive analysis for the Cointelegraph BrazilConsimo pointed out positive market reaction to the statement by the President of the central bank (Fed) that further interest rate hikes will be assessed “from meeting to meeting” and expectations of a possible prolonged rally in equities as two vectors capable of propelling the price of BTC into the $30,000 region:

“Bitcoin is likely to target the $28,000-$33,000 region in the coming weeks, driven by market reaction to recent FED announcements and the bullish formation the S&P 500 is making.”

A correction from the 21-week moving average support – the region highlighted in the second pink rectangle of the chart below – should not be viewed with concern by traders, but rather as an opportunity. As long as the lows continue to move higher and higher, this could be a big area of ​​accumulation going forward, the analyst suggests.

BTC/USDT (Binance) daily chart with support and resistance zones. Source: Crypto Investor (TradingView)

With the FOMC (Federal Open Market Committee) suspended until September 22, the date of the next US interest rate adjustment meeting, traders should stay tuned for the release of the price index. consumption (CPI), which measures the inflation USA on Wednesday next week.

Until then, Consimo says, the bullish outlook for the S&P 500 should prevail:

“Everything indicates that the S&P 500 should test the 4,400 points in the coming weeks. It is still possible that there will be a test of the 2022 top at 4,800 points by September. This projection is based on the weekly chart below, where we can observe the break of the downtrend line of the relative strength index (RSI) and MACD (converging and diverging moving average) close to the upward crossover.

S&P 500 Index weekly chart, with RSI and MACD. Source: Crypto Investor (Trading View)

O dollar also lost steam in recent days, with the DXY hitting near-month lows. Although not yet confirmed, it is possible that there is also a trend reversal for DXY in the short term, says the analyst of Crypto Investor:

“We have a bearish divergence (when the price makes higher highs but the RSI, which measures the strength of the move, hits 2 highs lower) on the DXY weekly chart. losing. These 2 factors indicate that we will most likely have a trend reversal there.”

DXY weekly chart with bearish divergence. Source: Crypto Investor (Trading View)

Although the easing of the macroeconomic scenario was largely responsible for the rise in Bitcoinindicators of economic activity in the United States continue to be the main threat to the continued recovery of the cryptocurrencies in the short term, warns Consimo:

“Negative news, such as higher-than-market inflation, weaker-than-expected industrial activity and non-manufacturing sectors, in addition to updated unemployment data, could frustrate the reversal. trend that seems to be underway, as they may make the Fed reassess its monetary policy for the second half of this year.”

However, August started with mildly positive news for the US economy. The industrial activity index (PMI) fell from 53 in June to 52.8 in July. Although it hit its lowest level since June 2020, according to a survey by the Institute for Supply Management (ISM) published on Monday, the result is above the expectations of analysts consulted by The Wall Street Journal, who forecast a pullback to 52.1.

Meanwhile, just hours before the close of the first daily candle in August, BTC/USD is at $23,000, trading down 2.5% in the past 24 hours, according to Of make CoinGecko.

With the reversal of the market this weekend and this Monday, the Crypto Fear and Greed Index Returns to Fear Zoneafter a brief moment of neutrality recorded in recent days, as Cointelegraph Brasil reported recently.

Disclaimer: This is not an investment recommendation and the opinions and information contained herein do not necessarily reflect the positions of Cointelegraph Brasil. Each investment must be accompanied by research and the investor must inform himself before making a decision.


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