Financial markets don’t operate in a silo. They’re all related in some way, especially risk assets like stocks and cryptos.
Like it or not, US stocks are still the number one risk asset. So, while stocks and crypto aren’t correlated most of the time, they are when the S&P 500 decides to correct.
As such, I must consider where the S&P 500 is when I’m evaluating when to allocate more capital to cryptos.
That’s what today’s issue is all about. We’ll look at where the S&P 500 is trading and what it means if you’re trying to decide where to buy more cryptos on this pullback.
The S&P 500 and Cryptos
I’ve discussed the concept of risk-on and risk-off before. But a refresher may be in order.
On Friday, the S&P 500 tested a key resistance area near 4,350. That’s the top of a massive rising wedge that extends from March of last year.
It outlines the price action since the “COVID collapse”, so it’s a big deal, in my opinion.
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