The US stock market recorded heavy gains on Monday following the US/China trade agreement on tariffs. However, Bitcoin (BTC) chose to go in the opposite direction and sank below $101,000. Is this just a pause in Bitcoin’s trajectory to all-time highs?
S&P 500 heads back to highs
Source: TradingView
The weekly chart for the S&P 500 shows a very strong bounce indeed since the depths of despair when President Trump announced tariffs across the board globally. The huge rally racked up another 3.26% for the S&P 500 on Monday, leaving the index not far short of 6,000 points, at 5,844.
A big resistance level has been reached now, and it remains to be seen whether optimism for eventual trade agreements across the world will win over a stock market that could be seen as overpriced.
$BTC rejected at $104,000 resistance
Source: TradingView
The big resistance level is $104,000 for Bitcoin. It can be seen in the 4-hour chart above how the price has very much respected this horizontal level, and how no candle body has been able to close above, even on this short time frame.
The latest rejection sent $BTC down to the 0.382 fibonacci at $101,000. If this is as deep as the rejection gets, this would be quite bullish. 4-hour and 8-hour Stochastic RSIs are at the bottom and the 12-hour is on its way down. Towards the end of this week the definitive breakout could occur.
However, there is the possibility that the price may not hold the $102,000 horizontal level, and further downside could take place. This could even be a drop all the way down to the top of the bull flag. That said, this could be a bullish confirmation of the breakout before heading back to the highs.
A needed correction?
Source: TradingView
The weekly chart displays the current battle between the bulls and the bears. The price is being held above the $102,000 support level, but if this fails, a deeper correction could occur.
Looking at it from the bull’s perspective, the rally up from the base of the bear flag totalled 42% from bottom to top. There was not one red candle printed. Therefore, a pause at the major $104,000 horizontal resistance, and some kind of rejection, probably needed to happen.
Monthly chart says $102,000 is the major horizontal resistance level
Source: TradingView
Stepping out a lot further into the monthly time frame, it can be seen that it's actually the $102,000 horizontal level that is the major resistance. Therefore it’s this level that must be overcome.
At the bottom of the chart, the Stochastic RSI is showing a cross up of the blue (fast) line over the orange (slow) line. Also, in the RSI, the indicator line is crossing above the yellow moving average. Both must continue to be the case at the end of this month in order for this bull run to continue.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
