Why Crypto Is “Likely To Dump” As It Lags The S&P 500, Expert Says

Bitcoin is still stuck at its current levels. The number one cryptocurrency has not been able to push up and may be in danger of revisiting its yearly bottoms.

Related reading | Outflows rock bitcoin as institutional investors pull the plug, more downside to come?

At the time of writing, Bitcoin is trading at $20,700 with sideways movement in the last 24 hours and last week.

BTC price is moving sideways on the 4 hour chart. source: BTCUSD TradingView

According to crypto analyst Justin Bennett, Bitcoin is hinting at more losses. The cryptocurrency remained in a tight range even as the traditional market rebounded.

Bitcoin has shown a strong correlation with traditional stocks. In particular, the price of Bitcoin appears to be moving in tandem with the Nasdaq 100 Index and the S&P 500 Index.

However, this dynamic has changed in the shorter time frames which makes BTC lagging behind with stocks trending higher. Bennett believes that this is an indication of an imaginary error, a false bullish move before a retest of previous support.

At the moment, the analyst claims that nothing is more important to the price of BTC than stocks. Via Twitter, Bennett Wrote Next and share the chart below:

Everything for #crypto boils down to this… Will the S&P 500 fail to hold above 3880? If that’s the case, and we get an hour-long close below, then this latest rally becomes fake, and we’re likely to get the next bearish leg for stocks and cryptocurrencies alike. Everything else is just noise. You literally cannot trade BTC using the above S&P chart. As of now, it looks like this level will fail.

S&P 500 Index Breaks Below Major Trend Line And Points To More Losses, Will Bitcoin Price Follow? Source: Justin Bennett via Twitter

As seen in the chart above, the S&P 500 has broken below a major trend line and appears to be heading towards critical support at 3800. Bitcoin appears to hold its levels despite the price action of the S&P 500, but Bennett ruled out the possibility of a “fake” due to general weakness. In the market.

Bitcoin levels to watch in case of further losses

Data from Material Indexes shows that liquidity on the cryptocurrency exchange Binance has been constantly moving around current levels. There is more than $30 million in bids below the price of BTC which could provide important support.

However, as shown below, orders are being asked to be bloated which could prevent BTC price from breaking above $21,000 and out of the danger zone. Analysts from Material Indicators have identified levels between $17,000 and $19,000 as the next potential area for Bitcoin.

Related reading | Glassnode considers the 2022 bear market to be the most terrible for Bitcoin and all cryptocurrencies

At these levels there are significant pools of liquidity, and the bitcoin price tends to trend towards these levels. The analyst added:

This looks like a ladder for the #BTC bids you intend to fill. Time will tell if it is full as it settles or if it needs adjusting closer to the active trading range.

The highlighted box is BTC’s largest liquidity area and a potential target in the event of further downside price action. source: Material indicators via Twitter

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