After the first Federal Reserve rate cut in four years, financial markets have shown a marked resurgence. The S&P 500 surged past $5,700, while the Nasdaq saw a 2.6% increase. Simultaneously, Bitcoin ($BTC) briefly touched $64,000 on Friday before retreating just below this critical resistance level. The anticipation of potentially three more U.S. rate cuts before year-end has created an atmosphere of optimism across various asset classes, with the S&P 500 leading the charge.
S&P 500 Breaks Through Resistance – New All-Time Highs
The S&P 500 has been on an upward trajectory since October 2022, moving within an ascending channel. The one notable dip outside this channel occurred in October 2023, but the index quickly recovered. A major resistance level, $5,639, which aligns with the 1.618 Fibonacci retracement, had been holding the price back since July. However, this week marked a significant breakthrough, with the index pushing beyond this barrier.
With the S&P 500 now comfortably trading above $5,700, attention turns to a new target of $6,967, corresponding to the 2.618 Fibonacci level. This represents a potential 22% gain from the current price, setting the stage for further growth in the coming months as the market continues to benefit from looser monetary policy.
Bitcoin: Correction or Opportunity?
While the S&P 500 enjoys a bullish breakout, Bitcoin ($BTC) is experiencing a more uncertain moment. The cryptocurrency’s short-term price action indicates that a correction may be imminent. Stochastic RSI indicators on shorter timeframes are signaling overbought conditions, suggesting downward momentum could soon take hold.
Looking at Fibonacci retracement levels, Bitcoin’s price is expected to test support at $61,600 (0.382 Fibonacci level). A bounce from this point could reignite bullish momentum, positioning the digital asset for a strong recovery. However, if this level fails, a deeper dip to $60,000 (0.618 Fibonacci level) becomes a possibility.
The Battle at $65,000 – Bitcoin’s Macro Picture
Despite short-term fluctuations, Bitcoin’s long-term outlook remains bullish. On the weekly chart, $65,000 emerges as a key resistance level, setting the stage for a potentially explosive price movement. The weekly Stochastic RSI, an indicator often used to gauge long-term momentum, is signaling potential upside. The blue, fast-moving line has crossed above the 20 level, and if the orange, slower line follows suit, Bitcoin could see a surge in price momentum, possibly breaking through the $65,000 resistance and triggering a larger bull run.
With the Federal Reserve signaling the possibility of additional rate cuts before year-end, risk assets like Bitcoin could benefit from the easing financial conditions. Traditionally seen as a more volatile asset, Bitcoin has the potential to outperform in an environment where liquidity is abundant. However, its path to higher prices will likely depend on its ability to break through key resistance levels, particularly at $65,000.
Also Read: Solana Surges 14.5% As Bitcoin Hits $64K – Will SOL Break $200 This October?
Meanwhile, the S&P 500 remains on solid ground, riding the wave of relief in traditional markets. As investors navigate a new era of rate cuts, both Bitcoin and the S&P 500 present compelling opportunities, albeit with very different risk profiles. Whether Bitcoin can join the stock market in setting new highs remains to be seen, but for now, all eyes are on the next battle at $65,000.
As the Federal Reserve continues to loosen monetary policy, markets are reacting positively, with the S&P 500 breaking out to new all-time highs. Bitcoin, while facing short-term correction risks, could be poised for a significant move higher if it can overcome the $65,000 resistance level. Investors across traditional and crypto markets alike are closely watching the next steps in monetary policy as the year unfolds.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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