Bitcoin BTC/USD was moving over 3% higher during Friday’s 24-hour trading session as Wall Street started to rebound, which Benzinga called out as a likely scenario on Thursday.
Bitcoin’s pop higher was pulling Ethereum ETH/USD and Dogecoin DOGE/USD up in tandem. The crypto market has shown strength in comparison to the general market lately, with many coins and tokens recapturing the 200-day simple moving average (SMA) as support.
This could indicate the crypto sector is front running a possible bull cycle in the general market, which would bring hope back to bullish retail traders who saw their portfolios dwindle in 2022. For the bear market to officially come to an end, however, the S&P 500 has a long way to go.
On top of regaining the 200-day SMA and breaking up through a long-term descending trendline on the daily chart, the S&P 500 needs to rebound 20% from the Oct. 13 low of $3491.58 to negate the current bear market. The S&P 500 has been struggling to pop above the desecending trendline since it fell under the level on Jan. 5, 2022 and most recently rejected the area on Wednesday.
Although the crypto sector moves in tandem with the stock market most of the time, there are times at which the two markets disconnect. For Bitcoin and Ethereum in particular, the two cryptos look set for new highs, regardless of whether the S&P 500 can break bullishly over the coming days.
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The Bitcoin and Ethereuem Charts: Bitcoin and Ethereum broke up from bull flag patterns on Friday afternoon after consolidating within the formations since Jan. 15. The crypto’s break up from the pattern also confirmed Bitcoin and Ethereum’s respective uptrends are intact.
Both cryptos are trading above the 200-day SMA on the daily chart, with the 50-day SMA trending upwards. If Bitcoin and Ethereum are able to remain well above the 200-day SMA for a period of time, the 50-day SMA will cross above the 200-day, which will cause a golden cross to form.
If Bitcoin and Ethereum close Friday’s trading session near their high-of-day price, the cryptos will print bullish Marubozu candlesticks, which could indicate higher prices will come again on Saturday. The second most likely scenario is that the cryptos will form inside bars to consolidate Friday’s spike higher.
Bitcoin has resistance above at $22,729 and $24.206 and support below at $21,313 and $19,915.
During Friday’s session, Dogecoin was popping higher but hasn’t flashed any signals that the next higher high has occurred. Like Bitcoin and Ethereum, if Dogecoin closes near its high-of-day, continuation could occur on Saturday.
Dogecoin has resistance above at $0.091 and $0.099 and support below at $0.083 and $0.075.
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© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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