US stock markets in the green help Bitcoin and Ethereum gain bullish traction before the weekend
- US stock indexes fight off bears and recover from recent fall, driving Bitcoin and Ethereum gains.
- Analysts believe Bitcoin has bottomed out and the asset could start breaking to the upside consequently, as trend reversal is in place.
- Ethereum has climbed above $2,100, a key level for the altcoin and analysts predict a continuation of the upmove.
Bitcoin and Ethereum have a high correlation with US stocks. The recovery of the S&P 500 on May 13, therefore, had a positive impact on investors’ sentiment and promoted price gains in Bitcoin and Ethereum.
Bitcoin, Ethereum bounce in response to recovery in stocks
The US stock markets started its recovery on Friday, with Bitcoin price responding to the rise in S&P 500.
Bitcoin and Ethereum prices are up 4% and 6% on the day The recovery in cryptocurrencies has been fueled by the positive sentiment among investors amid the rise in stock indexes and a trend reversal in the assets.
Michäel van de Poppe, a crypto analyst and trader, tweeted in response to the BTC reaction to the advance in US stock markets,
This is going to be a very decent weekly candle on the U.S. stock markets if we close like this. #Bitcoin also reaction in a positive manner.
— Michaël van de Poppe (@CryptoMichNL) May 13, 2022
@crypto_birb, a leading analyst, believes that the chances of Bitcoin hitting a bottom are high, since the BTC price chart reveals patterns that started breaking to the upside consequently. The analyst believes a trend reversal in Bitcoin is likely, within the next few months.
Also, worth watching #Bitcoin chart pattern play out pic.twitter.com/DPRf3jDje2
— CRYPTO₿IRB (@crypto_birb) May 13, 2022
Some analysts believe the short-term bounce in stocks is a result of near-term capitulation. They warn that a downward trend may still be firmly in place.
Fawad Razaqzada, a market analyst at City Index, said,
...as we have seen time and time again, stocks have struggled to sustain any recovery attempts as traders have been quick to take profit on rebounds amid a bearish macro back drop — rising interest rates, low growth and high inflation.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
