We see three charts from legacy markets that may be relevant to Bitcoin’s (BTC) future.
Looking at the Euro vs. the U.S. Dollar, EURUSD, 1.1247 seems like an important pivot. That level is the 76 percent retracement of the recent up move. If EURUSD gets above that level, it could be a sign of stability. If EURUSD can’t get back above 1.1247, the chart points to a scenario where a double bottom could form near the recent low at 1.1175 (Figure 1).
This is relevant for Bitcoin (BTC). If the Euro holds at support or makes a double bottom, that could signal a top in the U.S. Dollar. We would go as far as to say that Bitcoin (BTC) is holding up inside its tight range because a U.S. Dollar top (and Euro bottom) may be on the horizon.
The Gold ETF (GLD) is another important chart to watch. Crypto Twitter is thinking GLD may be topping out. In our view, GLD is resting right on a big Fibonacci support level near $121.78. GLD is also supported by a gap from earlier in the month (Figure 2). If GLD can hold at support, that might be constructive for Bitcoin (BTC). Bitcoin (BTC) is sometimes referred to as “digital gold.”
Perhaps the biggest wild card for Bitcoin (BTC)is the stock market. Currently, bulls and bears in S&P futures (ES) are staging a battle near a key pivot at 2,817. That level is right near the peaks from late last year where S&P futures (ES) broke down (Figure 3).
There is a distinct bearish case for ES. The recent move above $2,817 may have been a liquidity event where old bears were stopped out and smarter bears initiated shorts.
While the chart may tilt slightly bearish, it may be a contrarian bullish sign for stocks that Warren Buffet seems to tilt bearish on the economy. When speaking about the economy on Mar 28, Buffet said, “it looks like things are slowing down.” Fading Buffet is a temptation too hard for a crypto mind to resist.
Overall, it is not clear whether the bulls or bears will win in stocks. It is also not clear if Bitcoin (BTC) can, at long last, rally when stocks are potentially falling.
Bottom Line: When it comes to the macro picture, crypto traders should watch key levels in FX, Gold, and stocks.
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