What Bitcoin Hints About the Stock Market’s Rally

[Trading With Larry Benedict]( What Bitcoin Hints About the Stock Market’s Rally By Larry Benedict, editor, Trading With Larry Benedict There’s a lot of noise around bitcoin. But there’s a message for stock investors in bitcoin’s noisy movements. Because if you follow bitcoin’s price action closely enough, you’ll see that it can hint at the next move in the stock market. That’s because it can help us figure out investors’ mood and their willingness to take risks. When the crowd starts making more bullish bets in speculative asset classes like cryptocurrencies, that’s a good sign that stocks will follow. The opposite can be true as well. So when bitcoin starts moving, pay attention. Today, let’s take a look at what it’s saying could happen next… Recommended Link [You need to know these two things about AI stocks ASAP…]( [image]( One of the world’s most successful investors just went public with what promises to be two historic predictions… - Many high-flying stocks of AI's “First Wave” are about to come crashing down… just like many Dotcom stocks did. - When the dust settles, a “Second Wave” of AI stocks will explode higher in the next 36 months thanks to little-known “digital twin” technology. [To discover his winners and losers from the coming AI shakeout, go here now.]( -- Tipping the Stock Market’s Trend Bitcoin has a history of leading key directional changes in the stock market. Just look at the price action over the past year to see what I mean. In the chart below, you can see that bitcoin peaked last summer at “1” several weeks ahead of the S&P 500 (“a”). The market went on to decline by 10%. [chart] [(Click here to expand image)]( Then bitcoin found a bottom at “2” and started moving higher well ahead of the S&P 500 (“b”). In fact, bitcoin led the S&P 500’s recovery by over a month. It suggested investor greed was still present… and that stocks could recover. But look at what happened at “3.” Bitcoin recently peaked and turned lower on March 13. That preceded the peak in the S&P 500 (“c”) by about two weeks. The S&P 500 went on to decline by 5%. But it’s now recovering and is close to testing the prior high. And bitcoin isn’t keeping up. So this diverging bitcoin trend could spell trouble for the stock market… Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Bitcoin Is Bearish During the March peak, bitcoin was flashing a major warning sign of a top. The Relative Strength Index (RSI) was diverging negatively from price at that time. You can see that in the chart below. Bitcoin moved above the $70,000 level in March. But the RSI started making lower highs (shown with the dashed trend line). The RSI got even worse when bitcoin came back to retest $70,000 again in early April. [chart] [(Click here to expand image)]( Since then, the RSI has been under 50. That shows weak price action. This is also evident in bitcoin’s downtrend, making lower highs and lower lows. But here’s where things get concerning… Bitcoin’s price action has stayed bearish despite the S&P 500 trying to recover. The S&P 500 made a recent low on April 19 and is moving back above its 50-day moving average (MA). But bitcoin’s price action remains stuck in a downtrend. Bitcoin is also below its 50-day MA (blue line in the chart) while the RSI is under resistance at 50. With this in mind, investors have another reason to approach the recent rally in the S&P 500 with caution. Regards, Larry Benedict Editor, Trading With Larry Benedict [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](