The S&P 500 is trading on the edge of must-hold support at 3,800. Meanwhile, Bitcoin tested the $19,800 critical level once again today. It seems everything is on the edge.
Today, I discuss what I’m watching from the S&P 500 to trigger the move lower, and how it impacts crypto.
Plus, updates on TOTAL, BTC, ETH, SOL, and VET!
S&P 500 (SPX500)
Impressively, the S&P 500 managed to hang onto 3,800 support today. That’s a key horizontal level and ascending channel support from June 17th.
A close below that 3,800 area would expose 3,640, which would likely drag cryptos with it.
I continue to think we see the S&P test the 3,400 region in the coming weeks. That’s the pre-COVID high and an area that will serve as a magnet for this market.
Keep in mind that 3,400 is about 11% below current levels. And if past performance is any indication, an 11% drop from the S&P 500 could translate to a 20-30% loss for BTC.
Total Crypto Market Cap (TOTAL)
The TOTAL chart has been super clean in recent weeks. We have the $860B macro support, along with the neckline of a failed inverse head and shoulders near $890B.
We saw TOTAL drop below that neckline yesterday, which confirmed the false move over the last few days. That fakeout is likely to trigger an extended move in the opposite direction or lower in this case.
Just know that TOTAL needs to close a day below $860B to secure the breakdown. Until then, it’s above macro support.
My $700-$730B objective is still very much intact. I think TOTAL will want to test this area in the coming weeks as it’s a massive confluence of support.
Bitcoin is managing to hold above $19,800, which I figured it might. That’s an incredibly significant level and one that won’t go down without a fight.
It’s going to take a daily close below $19,800 to open up lower levels, including $17,600 and potentially the $16,000 region.
I don’t think the low is in for Bitcoin just yet. Even a move to $16,000 may only provide some temporary relief given that we appear to be entering a recession and the S&P is off its all-time high by just 19%.
That said, I think a move to the $16,000 region could offer a decent chance to play a relief rally. In the meantime, I’ll look for shorts below $19,800.
ETH tested its neckline today at $1,100. I mentioned this level in yesterday’s video, noting that it will likely take a 4-hour close below it to confirm the breakdown. Until then, it’s support.
However, the bigger level for ETH is $1,050. It’s going to take a daily close below that to open up lower levels, including $900 and potentially $780.
But as long as ETH is above $1,050 and even $1,100, we have to respect the potential for some relief back to $1,170 resistance.
SOL has some interesting technicals. It recently broke above $37.40 on the daily and weekly time frames.
However, yesterday’s session closed back below it, which suggests that the recent move above $37 was a fakeout.
That could send SOL lower, especially if we see it close below channel support near $34.
Judging by the weekly time frame, a retest of the $20 region seems likely in the coming weeks.
Key resistance for SOL comes in between $37.40 and $39.25.
VET broke below its neckline yesterday at $0.024. However, it’s remaining above $0.022, which is much more significant support for the market.
A daily close below $0.022 would open up $0.016 and below that is $0.01.
Resistance for VET is around $0.0237, which is the neckline it broke below yesterday.
All in all, the market looks relatively weak. So even if we do see some additional relief, I think a move to at least $0.016 makes the most sense right now.