Bitcoin price held steady above $95,550 despite declines in popular American stock indices and ETFs.
Bitcoin (BTC) was trading above $96,550 at last check Saturday morning, following U.S. equities’ worst day of the year.
Nasdaq 100, S&P 500, and SCHD Retreats
The blue-chip S&P 500 index fell by 1.71%, while the tech-heavy Nasdaq 100 dropped by 2%, erasing 455 points. Similarly, the Dow Jones and small-cap-weighted Russell 2000 decreased by 1.70% and 3%, respectively.
The Schwab US Dividend Equity ETF, known as SCHD, shed 0.5%. This ETF tracks major value stocks in the U.S. and is popular among dividend income investors.
Technology stocks like Nvidia, Apple, Microsoft, and Meta Platforms were among the biggest decliners.
The CNN Money fear and greed index remained in the fear zone at 35, while the crypto fear and greed index shifted into the greed area at 38.
Both Bitcoin and American equities have faced declines due to elevated market risks linked to President Donald Trump’s tariffs and the Federal Reserve’s policies.
This week’s Fed minutes indicated that most officials prefer a restrictive monetary policy because inflation remains high. Earlier this month, data indicated the headline and core consumer price indices rose to 3% and 3.3% in January, moving further away from the desired 2% target.
Bitcoin and other cryptocurrencies tend to perform better when the Fed adopts a dovish stance. They saw a decline in 2022 when rates were raised, but rebounded between 2023 and 2024 when the Fed pivoted.
Investor concerns regarding tariffs are increasing market risks. Trump has already initiated tariffs on Chinese imports. Tariffs affecting Canada, Mexico, and steel and aluminum will begin in March, with potential levies on European goods also under consideration.
Higher tariffs often result in stagflation, characterized by high inflation and slow growth. This scenario is challenging, as rate hikes aimed at curbing inflation can stifle economic growth, while rate cuts can spur inflation.
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Bitcoin Price Chart Indicates Rebound
Positively, Bitcoin price charts suggest a strong comeback is possible in the coming weeks. The weekly chart reveals a bullish flag pattern, characterized by a tall vertical line followed by consolidation, usually leading to a significant bullish breakout.
Before this, the Bitcoin price formed a cup-and-handle pattern, with a cup depth of about 78%, suggesting a price target of approximately $121,590, measured from the cup’s upper side.
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