After the Federal Reserve cut interest rates by 50 basis points, the markets rallied strongly on the event. The S&P 500 posted a new all-time high, and Bitcoin (BTC) surged more than $4,000. Will $BTC now follow U.S. stocks and make its own all-time high?
Further potential growth across all markets
After the first Federal Reserve rate cut in 4 years, markets have reacted with relief. The S&P 500 shot through $5,700, and the Nasdaq has improved 2.6%. At the same time, $BTC briefly touched $64,000 on Friday, before settling back under this resistance level.
With potentially another three U.S. rate cuts before the end of the year, the scene is set for possible further growth across all markets. The S&P 500 is currently leading that growth, but $BTC, considered a more volatile risk asset, could outperform in this environment of loosening monetary policy.
S&P 500 breaks out to new all-time highs
Source: TradingView
Looking at the weekly chart for the S&P 500, it can be noted that the price has been traversing inside of an ascending channel since October 2022, with only one dip out of the channel in October 2023.
It can be seen that resistance has held the price at $5,639, at the 1.618 fibonacci since early July, but this week has seen a breakthrough of this level, and the price is taking hold above. $6,967 is a target now at the 2.618 fibonacci - a 22% rise from the current price.
$BTC short term correction beginning?
Source: TradingView
The short term price action for $BTC suggests that the next correction could be beginning. Price has started to roll over, and although it’s early days, all short term Stochastic RSIs are at the top, signalling that a cross back down, bringing momentum to the downside, is potentially about to happen.
Looking at the Fibonacci levels on the chart, it would at least be expected that the price comes down to the 0.382 Fibonacci at $61,600. If the next bounce did take place from this level, it would be extremely bullish. That said, a deeper dip to the 0.618 Fibonacci level at $60,000 is also a possibility.
$BTC approaching battle at $65,000 resistance
Source: TradingView
However, it’s the macro weekly chart that looks the most bullish. Yes, the price could possibly be held up in the short term, but the big battle at $65,000 looks as though it is going to take place.
The weekly Stochastic RSI at the bottom of the chart is likely to play no small part in this. The blue, fast indicator line has already crossed up through the 20 level, and should the orange, slow line follow it through this level, there could be fireworks to come. Big upside price momentum could then come into $BTC, providing the power to break through the resistance and the top of the bull flag.
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.
