Bitcoin (BTC) surpasses S&P 500...Smart money shifting to cryptocurrency

▲ Bitcoin (BTC), S&P 500/AI-generated image

The US stock market is showing warning signs of weakening fundamentals near its all-time highs. In contrast, the cryptocurrency market is demonstrating a solid foundation for a technical rebound, with most of the top 100 assets maintaining their 200-day moving average.

According to crypto media outlet CryptoPotato on September 24 (local time), analyst Scott Melker stated via X (formerly Twitter) that 257 of the stocks included in the US S&P 500 index are trading below their 200-day moving average. Despite the index hovering near its all-time high, only about 49% of its constituent stocks are above the 200-day moving average, indicating that the internal health of the stock market remains in a bearish phase. In contrast, 88 of the top 100 virtual assets are firmly positioned above their 200-day moving average, presenting a stark contrast to the stock market.

Melker assessed the trend of major virtual assets maintaining not only their 200-day moving average but also their 50-day and 100-day moving averages as “a clear and strong bullish alignment formed across all areas.” He emphasized, “The shallow market breadth seen in the stock market near its highs has historically been a warning sign,” adding, “the robust market breadth in the virtual asset market, occurring when prices are a considerable distance from their highs, is a positive signal in contrast.”

Bitcoin (BTC), the leading virtual asset, rebounded from the $75,000 level to the $87,000 level, overcoming the negative factors of the failed vote on the US cryptocurrency market structure bill and the Federal Reserve's (Fed) benchmark interest rate hike, and is now consolidating around $84,000. Ethereum (ETH) also showed a 10% increase over the past week, consolidating downward support around $2,700. With Bitcoin's dominance exceeding 57%, the total cryptocurrency market capitalization has reached $2.96 trillion.

According to statistics from on-chain data analysis firm Santiment, the correlation between Bitcoin and stocks, gold, and the dollar has shown a clear weakening trend recently. This analysis suggests that, contrary to the market's conventional wisdom that virtual assets would simply follow the trends of traditional financial markets, independent price formation and capital flow movements are becoming apparent.

[Article Summary]

-While more than half of the S&P 500 constituent stocks fell below their 200-day moving average, 88 of the top 100 virtual assets surpassed their 200-day moving average, showing a healthy bullish alignment.

-Analyst Scott Melker highly praised the structural strength of the cryptocurrency market, which receives broad support at lower price levels, unlike the weak market breadth of the stock market.

-With the correlation between Bitcoin and traditional financial assets significantly weakened, the cryptocurrency market is building its own rally foundation, breaking away from stock market trends.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*