Bitcoin (BTC): Implication of Equities Rollover

April 30, 2019 / by Bill Noble

Looking at Bitcoin on a tactical level, it appears the recent rally was corrective in nature. The recent rally seems to have flushed out buy stops. Resistance is at a Fibonacci retracement at level $5,296 (Figure 1). In order to be bullish Bitcoin (BTC) again, there would have to be a sustainable move above $5,400.

 class= Figure 1

One thing that makes the tactical read on Bitcoin (BTC) worrisome is a massive rollover in U.S. equities and a breakout to the upside in the VIX (fear index).

In S&P futures (ES), the massive stochastics divergence with resistance at all-time highs is about to take its toll (Figure 2). This chart implies that stocks could go down sharply.

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The VIX fear index is breaking out of a major Fibonacci speed resistance line (Figure 3). This likely confirms the idea that equities have topped and “fear” is going to rise sharply.

 class= Figure 3

Bottom Line: Stocks appear ready to decline. If legal risk surrounding Bitcoin (BTC) is not resolved, Bitcoin (BTC) is susceptible to any flush lower in stocks.

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