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Can the index S&Take P 500 with you and bitcoin
Index S&P 500 Approaching Important Resistance Area $ 3230.
MA golden cross has formed on the daily chart.
SPX and Bitcoin Price Show High Correlation Since June 10.
Throughout June, between the stock index S&P500 (SPX) and Bitcoin (BTC) were highly correlated.
The former is approaching an important area of resistance, while the latter has already reached its resistance.
Long term resistance
On the weekly SPX chart, you can see that the index is trading very close to the important resistance area of $ 3230. In the week of June 8-15, the market reached this area, but was strongly rebuffed and formed a bearish engulfing pattern on the candlestick chart. Now the price is trying to make a second attempt to break this resistance. If she succeeds, the next resistance will be bulls at $ 3400.
It is worth noting that although trading volumes were small throughout the entire bullish move (with the exception of growth in the first week), the maximum values were in the bullish candlestick. However, for the breakout of such an important area of resistance, trading volumes must increase significantly.
What can the trading volume indicators in the market tell a trader? Join the discussion in our Telegram channel – and you will find out everything!
The daily chart paints a more positive picture. First, here the 50- and 200-day moving averages (MAs) have already formed a bullish crossover, with the shorter MA offering support for the price..
Also yesterday, the bullish engulfing candlestick advanced above the important resistance represented by the wicks of the last two weeks. This indicates upside potential in the direction of the previously indicated resistance area.
As soon as the market reaches it, it will be necessary to pay attention to the presence / absence of bearish divergence signals on the RSI. This will help us determine if the index succeeds in making a bullish breakout and heading towards $ 3400, or if it forms a double top and sags towards the nearest support area at $ 2950. At the moment, it looks like bearish divergence signals will appear on the chart as the RSI indicator is well below the June 10 level.
On the daily chart, the price has already made a bullish breakout of the downtrend resistance line and the $ 3150 area, which previously played the role of resistance. In addition, the SPX is moving along the upward support line, which coincides with the previously mentioned support area.
As long as the price is trading above these two support levels, its dynamics will be considered bullish, and we will expect the SPX to rise in the direction of the resistance area we indicated above..
Cryptocurrency trader @ColdbloodShill recently shared an SPX chart with readers showing that price is trading within an expanding triangle. Such triangles are supported for a very short time, and, according to the results of our analysis, the market should break through its upper border..
Correlation with Bitcoin
Last month, we already noticed that the correlation between Bitcoin and S&The P 500 is close to record levels. Since June 11, a very high degree of correlation has been observed between these two assets, which is confirmed by the histogram at the bottom of the graph (recall that the value “1” is considered a perfect correlation).
In the period 4-6 June, this correlation turned out to be negative for two days: bitcoin was growing, while SPX was decreasing. Now it is back in the positive zone again. However, this correlation is not always high, as evidenced by the first 10 days of June. We have already assumed that its coefficient tends to grow noticeably during periods of rapid market movements.
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