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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

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

Reynaldo Marquez
Reynaldo Marquez
2 years ago
2 mins read
crypto bitcoin btc btcusd Ethereum

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Bitcoin remains stuck at its current levels. The number one cryptocurrency has been unable to push upwards and could be in danger of revisiting its yearly lows.

Related Reading | Outflows Rock Bitcoin As Institutional Investors Pull The Plug, More Downside Coming? 

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

Bitcoin BTC BTCUSD
BTC’s price moving sideways on the 4-hour chart. Source: BTCUSD Tradingview

According to crypto analyst Justin Bennett, Bitcoin is hinting at further losses. The cryptocurrency stayed rangebound even as the traditional market rallied.

Bitcoin has displayed a high correlation with traditional equities. In particular, the price of Bitcoin seems to be moving in tandem with the Nasdaq 100 and the S&P 500 Index.

However, this dynamic has been changing in short timeframes making BTC a lagger as equities trend upwards. Bennett believes this is an indicator of a fakeout, a false upwards movement before a re-test of previous support.

At the moment, the analyst claims, there is nothing more important for BTC’s price than equities. Via Twitter, Bennett wrote the following and shared the chart below:

Everything for #crypto boils down to this…Does the S&P 500 fail to hold above 3,880? If so, and we get a 1h close below, this latest rally becomes a fakeout, and we likely get the next leg lower for stocks and crypto alike. Everything else is just noise. You could literally trade BTC using nothing but the S&P chart above. As of now, it looks like this level will fail.

Bitcoin BTC BTCUSD
S&P 500 breaks below major trendline and hints at further losses, will BTC’s price follow? Source: Justin Bennett via Twitter

As seen in the chart above, the S&P 500 broke below a major trendline and seems to be heading towards critical support at 3,800. Bitcoin seems to be holding its levels despite the S&P 500 price action, but Bennett ruled out the possibility of a “fakeout” due to the overall weakness in the market.

I've seen a few comments stating that this could be a fakeout.

The fakeout to the upside already occurred. The last 1h close confirmed it.

No guarantees, but fakeouts of fakeouts are rare. pic.twitter.com/GQjKCwzRm9

— Justin Bennett (@JustinBennettFX) June 28, 2022

Bitcoin Levels To Watch In Case Of Further Losses

Data from Material Indicators shows liquidity on crypto exchange Binance has been constantly moving around current levels. There are over $30 million in bids orders below BTC’s price which could provide important support.

However, as seen below, asks orders to have been swelling which could prevent BTC’s price to break above $21,000 and get out of the danger zone. Analysts from Material Indicators identified the levels between $17,000 and $19,000 as the next potential area for Bitcoin.

Related Reading | Glassnode Deems 2022 Bear Market As The Most Atrocious For BTC And All Cryptocurrencies

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

This looks like a ladder of #BTC bids that intends to get filled. Time will tell if it gets filled where it rests or if it needs to adjust closer to the active trading range.

Bitcoin BTC BTCUSD
The highlighted box is BTC’s largest liquidity zone and a potential target in case of more downside price action. Source: Material Indicators via Twitter
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Reynaldo Marquez
Reynaldo Marquez

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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