2 min read

Market comment

Market comment
Photo by Hans Eiskonen / Unsplash

Last week was a big shock for all investors: Although the Fed did not raise interest rates by 100 bps as feared, but "only" by 75 bps, the S&P 500 stock index fell by 7% within a few days. As expected, Jerome Powell's speech on the outlook - usually one of the sentiment killers - did the rest.

How does the situation look now and what can we expect for next week? As cryptos continue to be closely tied to the stock market, it's worth taking a look at the S&P 500 chart.

Here we see two things that give us courage for next week.

  1. the June low proved to be support and could form on a double bottom here. In the daily chart, we also see a hammer candlestick, which usually represents a bullish reversal pattern.

The chances are therefore not bad for a slight recovery of the market next week. This would be a good short-term signal for Bitcoin and all Altcoins.

What investors are afraid of is the infamous second leg down, as we saw for example in 2009 in the gread recession (again -11% to the first low).

S&P 500 during the economic crisis in 2008 / 2009 with the second leg down.

Should it come to that, which we currently consider rather unlikely, Bitcoin could test the 78.6 Fibonacci retracement again towards the June low. Lower values seem possible in such a case in the short term, but we believe in a rapid recovery.

Current Bitcoin setup. Establishement of a double bottom on a longer timeframe. 78.6 FR has - also in the past - served as a strong support.