Bitcoin price is emerging as a more reliable safe haven asset compared to the US stock market, amidst ongoing trade tensions and recession risks. BTC has been trading between $X and $Y this month and is on the verge of a bullish breakout, pending the clearance of a key level. Meanwhile, blue-chip indices like the Nasdaq 100, S&P 500, and Dow Jones are likely facing further declines.
Bitcoin Price Needs to Flip Just One Key Level
The daily chart shows that Bitcoin price formed a double-bottom pattern at $76,650 and is now hovering near the neckline at $88,660. Most importantly, it has encountered strong resistance at the 50-day and 200-day moving averages.
Bitcoin also faces significant resistance at a descending trendline that connects the highest swings since January 20th. To advance, the coin must move above these two moving averages and the descending trendline.
Overcoming these two key averages will negate the existing death cross pattern, triggering a potential rally that could propel Bitcoin to the psychological milestones of $90,000 and subsequently, $95,000.
Nasdaq 100, Dow Jones, S&P 500 Have Formed a Death Cross
Meanwhile, the American stock market is at risk of further downside as the benchmark Nasdaq 100, S&P 500, and Dow Jones indices have entered correction territory, declining by over 10% from their highest levels this year.
Furthermore, as illustrated in the chart below, the three indices have all registered a death cross—a bearish technical indicator that often precedes a significant price drop. This was their first occurrence since 2022, during which they each experienced a double-digit drop.
The three indices have declined for two main reasons. Recently, concerns have mounted regarding the slowdown in the AI industry that previously drove the stock market. For instance, dwindling demand for data centers has led Microsoft to abandon some of its data center projects.
Additionally, the trade war is intensifying, with the US and China targeting top industries. China has requested Boeing to pause aircraft purchases, while the US has restricted the sale of advanced chips from companies like NVIDIA and AMD.
Given these challenges, the three indices are likely to continue experiencing downward pressure until the Federal Reserve signals readiness to intervene. They will also remain under pressure until the US and China hold their deliberations. Meanwhile, Bitcoin is poised to solidify its position as a safer investment than traditional US stocks, given the ongoing trade tensions and economic uncertainties, as it emerges as a better safe-haven asset.
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