S&P 500 Pierces Resistance: What Does It Mean for Bitcoin (BTC)?

The S&P 500 Index (SPX) broke through long-term resistance today and reached its highest level in more than a year.

If a positive correlation with the Bitcoin price is recovered, this could signal a resumption of the uptrend in the cryptocurrency market.

What Is the S&P 500?

The Standard and Poor’s 500, or simply the S&P 500 (SPX), is a stock market index that tracks the performance of the 500 largest companies listed on stock exchanges in the United States. It is one of the most widely tracked stock market indexes.

The S&P 500 index is a market capitalization-weighted index. According to Wikipedia, as of August 31, 2022, the nine largest companies on the S&P 500 list accounted for 27.8% of the index’s market capitalization.

In order from highest to lowest weighting, they were: Apple, Microsoft, Alphabet, Amazon.com, Tesla, Berkshire Hathaway, UnitedHealth Group, Johnson & Johnson, and ExxonMobil.

The SPX listing dates back to the 1950s. Since then, the index has been in a long-term uptrend and is a market reflection of the health of the US economy.

S&P 500 long-term chart. Source: Wikipedia

SPX Reaches New Yearly High

The SPX had been in a downtrend since reaching the all-time high (ATH) of $4818 on January 4, 2022. Thereafter, almost the entire year was a bear market, which ended with a bottom at $3492 on October 11, 2022. The price followed the descending resistance line (black).

Since then, SPX has initiated an uptrend and has risen 24% to today’s valuation at $4338. At the beginning of 2023, the descending resistance line was broken through and subsequently validated as support (orange circles).

At the same time, the SPX price struggled with resistance in the $4200 area (green line). This important area has repeatedly acted as support and resistance. If a correction occurs, a bullish re-test of this level is expected.

Besides, today the SPX broke through another important resistance at $4325, which was the high reached in August 2022. If the increase does not turn out to be just a deviation,

Go to Source to See Full Article
Author: Ryan James

Did you like this?
Tip BTC Newswire with Cryptocurrency