The Bitcoin to S&P 500 ratio has been in bearish consolidation, indicating a divergence between the stock market recovery and cryptocurrency risk.
This divergence is quite interesting for an initial market analysis, as it highlights how the stock market's recovery has diverged from cryptocurrency risk. Unlike the major stock indices, Bitcoin is more than 8 percent below its previous highs, but a confirmed upward breakout could signal a new bullish trend.It suggests the continuation of the broader underperformance of cryptocurrencies.
From a technical perspective, this could be seen as a continuation flag pattern, likely leading to a breakout and new cyclical highs. The BTC vs. S&P 500 ratios currently indicate a bullish trend, suggesting a general positive bias towards risky assets.At this stage, it is critical for BTC to stay above the 50-day moving average to maintain this momentum.
Consequently, a break below this average would totally change the outlook, projecting it toward the 200-day moving average. Currently, Bitcoin is trading well above this level, supporting three theses:If the price retests the 200-day average, it could serve as potential support.
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