The crypto market has performed well this week even as US stocks, crude oil, and bond yields plunged, and the fear and greed index fell to the lowest level in years.
Bitcoin’s price has fluctuated between the support and resistance levels of $80,000 and $90,000. Ethereum (ETH) has hovered around $1,800, while Cardano (ADA) and Binance Coin (BNB) have stalled at $0.66 and $600, respectively.
S&P 500 and Nasdaq 100 are Nearing a Death Cross
Bitcoin and other altcoins face a crucial risk as the blue-chip S&P 500 and Nasdaq 100 indices approach their death crosses. A death cross is a technical analysis term that occurs when a short-term moving average crosses below a long-term moving average, often indicating a potential downturn.
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The chart below shows that the spread between the 50-day and 200-day moving averages has narrowed significantly in the past few days as the stock market tumbled. A death cross is one of the riskiest patterns in the market, as it usually leads to more sell-offs.
A death cross in the stock market could trigger panic-selling among investors in various asset classes, including cryptocurrency. This would affect Bitcoin and other altcoins like ADA, BNB, and ETH prices. Others like TON, SHIB, and XRP would also be affected.
Potential Catalysts for ADA, BNB, ETH, and Other Altcoins
However, there are two potential catalysts that may help prevent more downward trends for stocks and crypto for now. First, Donald Trump needs to eat his humble pie and show flexibility on tariffs. He will likely implement this if the stock market continues falling and his approval rating plummets.
A sign of flexibility would likely lead to animal spirits among investors and trigger more gains in the stock and crypto market.
The other catalyst would come from a Federal Reserve intervention. On this, the Fed, sensing a recession, may opt to intervene by making a jumbo interest rate cut and even initiate quantitative easing policies. Donald Trump has already urged Powell to consider this action, stating:
“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always “late,” but he could now change his image, and quickly. Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%”
Signs that the bank will implement these policies would also lead to more demand for risky assets, including altcoins like ETH, ADA, and Binance Coin.
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