BTC continues to show relative weakness against the S&P500 after rejecting at our resistance zone a few weeks ago. This has been something we have expected when this zone was reached and is only logical after weeks of BTC outperforming the SPX. Remember, the weekly bullish divergence on SPX during summer market the bottom for the index.
The divergence has not been reset yet. Once this box is broken, BTC's outperformance against the SPX will mean a more parabolic move in the crypto market, likely towards new highs for BTC and the index. This certainly takes time as this is a macro chart. Moving forward, it is worth noting that the index is following the exact pattern as in 2023. I am not a fan of bar patterns as they can easily break, especially when they get too prominent.
However, such bar pattern also shows how deep BTC and BTC/SPX can drop before continuation higher, even in bull markets. In 2023, the index dropped towards the 200D SMA before printing a higher high and initiating a macro uptrend.
This translated into a 20% drop for BTC. It is important to keep this is as an open option, as in case we actually get something similar, we are prepared and not caught off guard. I believe that over the next months BTC will continue to outperform the SPX.
Bottom on BTC/SPX
In hindsight it was such a good idea to focus on crypto over stocks.
Above the green box, we can talk about a macro change of trend for the index.
Resistance here, so not an area for new buys, but I remain confident that eventually this will be broken and BTC outperforms the SPX for at least a year.