The S&P 500 index crashed on Friday, and technicals point to further downtrend this week. It dropped by 104 points on Friday, its worst daily performance this year. This article explores how the S&P 500 crash may impact popular coins like Bitcoin, Ethereum, and XRP. Historically, a strong drop in American stocks leads to more downside in the crypto market.
S&P 500 Index Crash and Impact on Crypto Market
The S&P 500 index has flagged a sell signal after forming a rising wedge pattern. This pattern has two ascending and converging trendlines, and a crash typically happens when the two near their confluence, which is happening. A breakdown will point to more sell-off to $5,777, followed by $5,131, the January 13 and August 2024 low, respectively.
An SP500 crash may lead to more sell off in the crypto market that may affect coins like BTC, ETH, and XRP. Historically, these coins have a close correlation with each other.
S&P 500 Index
The S&P 500 index has also formed a slanted double-triple top pattern whose neckline is at $5,800. This pattern often points to a bearish reversal over time.
S&P 500 index
The last time a similar pattern happened was in 2022 and the S&P 500 index retreated from $4,800 to $3,470.
SP500 index chart
BTC, ETH, XRP Price Prediction
So, how wlll the stock market crash affect crypto coins like BTC, XRP and ETH? This technical analysis will identify potential targets.
BTC Technical Analysis
Bitcoin’s daily chart is sending mixed signals. On the negative side, it has formed a double-top pattern at $108,386 and the neckline at $89,215. A double-top is a popular bearish reversal sign in the market.
On the positive side, the coin has formed a falling wedge pattern, while the two lines of the MACD are about to form a bullish crossover. Additionally, Bitcoin already completed a cup and handle pattern on the weekly chart and is now forming a bullish flag.
These are signs that the Bitcoin price may rebound soon. More gains will be confirmed if it rises above the double-top point at $108,380. A bearish Bitcoin price forecast will become invalid if it drops below $89,215.
Bitcoin Price Chart
ETH Price Technical Analysis
Ethereum price has moved sideways in the past few days. It has formed a death cross pattern as the 200-day and 50-day weighted moving averages have crossed each other. ETH price has also formed a rising wedge and a bearish pennant, a sign that it may crash in the coming days as the S&P 500 index dives. A bearish breakdown may push it to this month’s low of $2,154. A move above the 200 WMA will invalidate the bearish view.
Ethereum Price
XRP Price Technical Analysis
XRP price may be at a risk of a strong breakdown as it slowly forms a head and shoulders pattern. This pattern has a head, shoulders, and a neckline, which it is approaching now. Ripple has also dropped below the 50-day WMA. Therefore, the coin may have a strong bearish breakdown, with the next point to watch being at $1.7907, its lowest point in February.
XRP Price Chart
Summary
The S&P 500 index has flashed a bearish signal, which may lead to more downside in the coming days ahead of NVIDIA earnings. A potential crash may have an impact on the crypto market, affecting coins like BTC, ETH, and XRP.
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