Crypto Bulls Face Warning as S&P 500 Shows Bearish Signals
Bitcoin and Ether continue to display bullish momentum, but macroeconomic headwinds may temper gains.
BTC and ETH Technicals Strong
Bitcoin (BTC $114,207.77) confirmed an inverse head-and-shoulders breakout, pointing toward a potential target near $120,000. Ether (ETH) followed suit, rising alongside broader crypto market optimism.
S&P 500 Rising Wedge Raises Caution
U.S. equity futures are signaling risk. The S&P 500 E-mini hit a record high of $6,542, forming a rising wedge pattern—a classic bearish setup. Converging trendlines indicate slowing bullish momentum, increasing the likelihood of a pullback that could pressure risk assets, including cryptocurrencies.
Traders are closely watching Thursday’s U.S. CPI data. A hotter-than-expected print, combined with recent labor market softness, could revive stagflation fears, weighing on both equities and crypto. The median forecast for August CPI is 2.9% year-over-year, while core CPI is expected at 3.1%.
BTC and ETH Options Signal Downside Hedging
Deribit 25-delta risk reversals for BTC and ETH are negative to December expiry, suggesting demand for downside protection. Institutional hedges, including ETH Sep 26 4K puts, are driving flows, according to Paradigm.
Altcoins Show Divergent Trends
XRP remains indecisive, confined within a descending triangle and Ichimoku cloud, pointing to consolidation. A breakout above resistance could target $3.38, but the current structure favors cautious trading.
Dogecoin (DOGE) outperforms, reclaiming its June trendline and rising above the Ichimoku cloud. This positions DOGE for a potential test of its July high at $0.2876. However, broader market risk, particularly a breakdown in the S&P 500 rising wedge, could cap gains.
Conclusion
While technical patterns for BTC and DOGE look constructive, traders must balance bullish setups with macro-driven downside risks, keeping an eye on equity trends and upcoming U.S. inflation data.
