Bitcoin rises 10% as Elon Musk, Jack Dorsey, and Cathie Wood gather to discuss the volatile cryptocurrency

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Bitcoin’s surged as much as 10% on Wednesday as Tesla CEO Elon Musk, Square CEO Jack Dorsey, and Ark Invest’s Cathie Wood gathered to talk about cryptocurrencies at The B Word conference.

Musk, Dorsey, and Wood answered a series of questions on cryptocurrencies and addressed a number of pain points associated with bitcoin, including its extreme volatility, intense energy usage, and reliance on fossil fuels and sustainable energy.

The surge higher in bitcoin helped the popular cryptocurrency reclaim a key technical support level at $30,000. As of Wednesday afternoon, bitcoin traded as high as $32,820, well above its Tuesday low of $29,308.

Many technical analysts view bitcoin’s $30,000 level as a make or break level for the cryptocurrency that could lead to significant downside if it doesn’t hold.

Katie Stockton of Fairlead Strategies said in a note on Wednesday that since the $30,000 level is heavily watched by traders, it is prone to a shakeout below that level, also known as a false breakdown. A false breakdown often traps bears below a key support level before surging higher.

So far, that playbook is playing out, with bitcoin breaking the $30,000 level on Tuesday before surging significantly higher on Wednesday.

Stockton sees bitcoin hitting resistance near its 50-day moving average at $35,000, representing potential upside of 8% from current levels. If bitcoin can decisively clear that level, bitcoin would likely gravitate towards its 200-day moving average near $44,000, representing potential upside of 36% from current levels.

Ultimately, bitcoin holding the $30,000 support level is instrumental for bitcoin bulls as they look to stem the significant bleeding in the crypto space that has occurred since bitcoin topped out near $65,000 in mid-April.

Read more: The head economist at a blockchain fintech firm names 2 of the most promising crypto SPAC deals on his radar – and explains why blank-check companies can be better alternatives to buying cryptocurrencies

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The stock market’s fear gauge spikes the most since February as the S&P 500 tests a crucial technical level

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A trader works during the Fed rate announcement on the floor at the New York Stock Exchange (NYSE) in New York, U.S., March 20, 2019.


A 2% decline in the stock market on Monday sent Wall Street’s fear gauge soaring the most since February as investors grow concerned about the spread of COVID-19’s Delta variant.

The Volatility Index, also known as the VIX, soared as much as 34% on Monday to above the key 20 level, which is often monitored by CTA and Quant funds as to when to add or remove leverage from their portfolio and in-turn buy or sell stocks. Monday’s move in the VIX failed to outpace the fear gauge’s 46% surge on February 25.

The move higher in volatility comes as the S&P 500 tests a crucial technical support level that could determine the future direction of stock prices. The stock market’s 50-day moving average stood at 4,239, just below the S&P 500’s price of 4,242 at time of publication.

Moving averages are a lagging trend-following indicator that technical analysts use to smooth out price movements and help identify the direction of the current trend in place.

Traders view the the 50-day moving average, which is the average daily closing price of a stock over its previous 50 trading sessions, as a short-term moving average that often represents areas of support or resistance for a security.

If the stock market notches decisive and consecutive daily closes below the 50-day moving average, investors will likely look to the 200-day moving average as the next key support level. The 200-day moving average for the S&P 500 currently sits at 3,894, representing potential downside of 8% from current levels.

Conversely, if the S&P 500 is able to decisively close above its 50-day moving average, that would tee the market up to retest its record highs made last week at 4,393, suggesting potential upside of 4% from current levels.

Year-to-date, the S&P 500’s 50-day moving average has successfully acted as support five separate times amid market sell-offs.

Technical analyst Katie Stockton views the current sell-off as a “healthy pullback” that could represent a solid buying opportunity for investors.

“I would be looking for opportunities to add exposure (and, cover shorts) in the coming days assuming the signal gives way to stabilization,” Stockton told Insider on Monday.

Meanwhile, Fundstrat’s Tom Lee thinks stable bond yield spreads suggests that the stock market won’t stage a deeper sell-off, and that the rising fears of COVID-19’s Delta variant set risk assets up well for a rally in the second half of 2021.

“We don’t expect this period of chop to lead to a larger 10%-like decline for markets. Sure, a 3%-5% sell-off, even to S&P 500 4,100 is possible,” Lee said.

The S&P 500 is currently down about 4% from its record highs reached last week, and is up about 13% year-to-date.

S&P 500 stock chart
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The latest stock sell-off is a ‘healthy pullback’ and investors should refrain from panicking, according to one technical analyst

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A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 9, 2020.

  • The ongoing sell-off in the stock market represents a “healthy pullback,” technical analyst Katie Stockton said in a note on Monday.
  • The S&P 500 is down about 3% from its record high, with losses accelerating in Monday’s trading session.
  • “We think the pullback will be short-lived, maturing later this week,” Stockton said.
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A sell-off in US stocks accelerated on Monday, with the S&P 500 falling as much as 2% amid investor concerns about rising COVID-19 cases due to the Delta variant.

But technical analyst Katie Stockton of Fairlead Strategies views the sell-off in stocks as a “healthy pullback” that will likely be short-lived and could present a buying opportunity, according to a Monday note.

The S&P 500 fell below its 20-day moving average on Monday for the first time since June, when a four-day pullback took hold in the market.

“But we think [this] pullback will be similarly short-lived, maturing later this week with the McClellan Oscillator and daily stochastics having already fallen to levels associated with the June low,” Stockton explained.

The McClellan Oscillator measures market breadth, which has been deteriorating in recent weeks as mega-cap tech stocks like Apple and Amazon led the market higher. Meanwhile, the Stochastic Oscillator is a momentum indicator that helps identify overbought and oversold levels of a specific security.

Stockton sees support for the S&P 500 at its 50-day moving average, which sits at 4,240 at time of publication. So far, that support has held, with the S&P 500 hitting an intra-day low of 4,239.82 before paring its losses.

“I think the market is getting flushed out here,” Stockton told Insider, adding that she is seeing lots of extremes in certain market indicators. Stockton said the S&P 500 e-mini futures flashed a DeMark “13 buy” signal, which hasn’t occured since June 21.

“I would be looking for opportunities to add exposure (and, cover shorts) in the coming days assuming the signal gives way to stabilization,” Stockton said.

Stockton isn’t alone in thinking that the current sell-off in stocks may be limited. Fundstrat’s Tom Lee argued in a note on Monday that the COVID-19 Delta variant represents “more bark than bite” and that the current sell-off sets stocks up well for a rally in the second half of the year.

S&P 500 futures stock chart
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AMC Entertainment falls 14% as increasing short bets test a key technical support level

AMC Entertainment
  • AMC Entertainment fell as much as 14% on Wednesday as the meme-stock frenzy begins to cool down.
  • The stock is testing a key support level at its 50-day moving average in Wednesday trades.
  • Short bets against the movie theater chain increased 6% over the past week, according to S3 Partners.
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Shares of AMC Entertainment dropped as much as 14% on Wednesday as retail traders begin to capitulate on the meme-stock frenzy and short bets against the theater chain increase.

The stock tested a key support level on Wednesday, as it traded around its 50-day moving average at $37.28. At time of publication, AMC was trading below the key support level at $35.27.

Moving averages are a lagging trend-following indicator that technical analysts use to smooth out price movements and help identify the direction of the current trend in place.

Traders view the the 50-day moving average, which is the average daily closing price of a stock over its previous 50 trading sessions, as a short-term moving average that often represents areas of support or resistance for a stock.

If AMC manages to decisively hold the 50-day moving average as support, then a rise back to its June peak of about $70 could be in order.

But a single trading day above its 50-day moving average is no sure-signal that AMC stock will continue to trend higher, as declining momentum indicators like the Relative Strength Index suggest fewer buyers are stepping in to support the stock than in previous weeks and months.

Another moving average traders will likely have their eye on if AMC falls below its 50-day is the longer-term 200-day moving average. The rising 200-day average is currently near the $14 level, representing potential downside of 60% from current levels.

But a stock’s decline below its 50-day moving average does not mean a swift decline back to its 200-day moving average is in order. One sign traders look for to generate a buy or sell signal is the crossover between the shorter 50-day and longer 200-day moving averages.

A buy signal is flashed when the short-term moving average crosses above the longer-term moving average, as happened for AMC in February. Using this method, a sell signal for AMC would not be generated unless the 200-day moving average crossed above the 50-day moving average.

As AMC tests its key 50-day moving average support level, short bets against the company are increasing, according to data from S3 partners. Over the past week, short bets increased 6% to 5 million shares, worth nearly $200 million.

While AMC short-sellers are down more than $3 billion in 2021 on a mark-to-market basis, that could soon reverse if AMC breaks below its 50-day moving average and trends towards its 200-day moving average.

Technical analysis chart of AMC
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A technical indicator is signaling that the S&P 500 will soon hit new all-time highs, Fundstrat’s Tom Lee says

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  • New advances in one technical indicator suggest that the S&P 500 is due for a new all-time high, Fundstrat’s Tom Lee said.
  • The advance/decline line hit an all-time high on Friday. The market breadth indicator leads the S&P 500, he said.
  • The index opened just 0.5% from an all-time high on Tuesday.
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A technical indicator that measures market breadth is signaling to Fundstrat’s Tom Lee that the S&P 500 will soon hit new all-time highs.

The benchmark index has been “flat” since April 16, as it touched 4,191 that day and closed on Friday at 4,204. However, a technical indicator called the advance decline line gained 1,247 points during the same time period, and hit a new all-time high on Friday.

“Historically, the advance/decline line leads the overall index,” said Lee in a Tuesday note.”Thus, surging to new ATH on 5/28/2021 presages the overall S&P 500 to advance higher. ”

The advance decline line rises when stock advances exceed declines and falls when declines exceed advances. According to Lee, it’s showing that market internals are marching to new highs.

He also explained that the S&P 500 may look weaker than the advance decline line suggests because of mega-cap technology stock weakness. Technology stocks are down 4% since April 16.

Lee reiterated Fundstrat’s base case forecast that the S&P 500 will reach 4,400 by “mid-2021,” a roughly 4% gain from current levels.

The S&P 500 hit an all-time high on May 7 of 4,238.04. On Tuesday morning, the index opened just 0.5% shy of that high.

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Bitcoin bottomed after a textbook 20% selloff, and a new uptrend is likely underway, Fundstrat’s Tom Lee says

Tom Lee

Bitcoin’s recent sell-off looks to have found support and a new uptrend is “likely underway,” Fundstrat’s Tom Lee said in a note on Wednesday.

The most valuable cryptocurrency sold off more than 20% in recent weeks after topping out just below $65,000 amid the Coinbase IPO. Bitcoin broke below $50,000, which represents a key psychological level for investors, but has since recovered and is trading near $55,000 as of Wednesday afternoon.

Now, bitcoin has found support near $47,000, which coincided with a “9” count buy signal generated by the DeMark indicator. This counter-trend indicator, created by Tom DeMark, helps measure price exhaustion in securities.

Traders should look for bitcoin to move above $62,000 to affirm that the sell-off is over, according to Lee.

“If this [$47,000] holds, and is likely, given this was a level prior to the last ‘sell countdown,’ bitcoin going to rally,” Lee said.

A potential target bitcoin could rally too is $69,000, representing potential upside of 25% from current levels, according to technical analyst Katie Stockton of Fairlead Strategies.

Read more: Goldman Sachs names 19 crypto-exposed stocks that have piggybacked on bitcoin’s surge to achieve returns that have nearly quadrupled the S&P 500

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Bitcoin’s free-fall below $50,000 has it testing a new technical threshold that could signal even more weakness ahead

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  • Bitcoin’s decline below $50,000 has the cryptocurrency testing a new technical support level that could signal more weakness ahead.
  • The 100-day moving average at $49,500 will be closely monitored by technical analysts after the 50-day moving average failed to hold as support.
  • Bitcoin could ultimately find support at $42,000, representing a 15% decline from current levels.
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Bitcoin’s weakening momentum has helped contribute to a swift 24% decline from its record high of nearly $65,000 over the past week, and more downside could be ahead if key technical levels fail to hold as support.

The first sign of trouble for bitcoin was a consecutive daily close below its 50-day moving average on Wednesday, which technical analyst Katie Stockton of Fairlead Strategies said was a key line in the sand for the cryptocurrency.

Moving averages are a lagging trend-following indicator that technical analysts use to smooth out price movements and help identify the direction of the trend in place.

Traders often view the the 50-day moving average, which is the average daily closing price of a security over its previous 50 trading sessions, as a short-term moving average that often represents areas of support or resistance.

Now, bitcoin is struggling to hold support at its 100-day moving average, another closely watched moving average that often helps identify areas of support and resistance in the short-term. The weakness was exacerbated on Thursday following reports that the Biden administration is eyeing an increase in the capital gains tax.

The 100-day moving average currently sits at $49,500. Bitcoin briefly fell below that level on Friday to $47,500, but has since recovered and is trading at $49,560. Consecutive daily closes below the 100-day moving average would set bitcoin up for more weakness ahead, and with bitcoin’s RSI still above 30, it has yet to reach levels considered oversold by traders.

According to Stockton, the current weakness could lead to bitcoin finding support at $42,000, which would represent an additional decline of 15% from current levels and a total drawdown of 35% from its record high.

That potential decline would not be out of the ordinary for bitcoin, which has historically experienced significant corrections amid a broader long-term uptrend. And despite the current weakness in bitcoin, Stockton believes bitcoin can ultimately hit $69,000.

“The pullback does not negate the breakout, but it suggests that its targeted level [$69,000] may take longer to achieve,” Stockton said, adding that despite the short-term pullback, bitcoin’s long-term momentum “remains strong.”

Read more: The investing chief of crypto asset manager Arca shares the 3 themes and 10 tokens he’s betting on – and explains how to execute his special-situations investing strategy in digital assets

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Bitcoin has fallen below $35,000 to key technical levels that analysts say could be make or break for the next move higher

A visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course's graph
A visual representation of the digital Cryptocurrency, Bitcoin.

  • The Bitcoin price hovered around $35,000 and technical analysts said this point was a pivotal one on the daily charts.
  • A break above this level could push Bitcoin back towards all-time highs around $41,000, while a marked drop below could trigger a fall towards key support at $30,000, they said.
  • Although the longer-term outlook for both cryptocurrencies remains skewed to the topside, further losses look likely in the coming days,” DailyFX strategist Daniel Moss said in a note.
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Bitcoin fell on Wednesday, heading for its largest weekly fall since late August, as a combination of a stronger dollar and a bout of profit-taking swept $172 billion in value from the cryptocurrency market since the start of the week, leaving the price at a pivotal point on the charts. 

Rival coins such as Ethereum and Ripple Labs’ XRP, along with smaller alt-coins Litecoin and Cardano, sagged after several days of heightened volatility. 

Trade in cryptocurrencies has been booming for the last five months in particular. Bitcoin has risen by 230% in that time, hitting a record above $41,000 on January 8, while Ethereum has gained 217%, prompting a number of prominent investors to warn about the dangers of speculative bubbles. 

Shark Tank star investor Mark Cuban on Tuesday compared the crypto trade to the dot-com bubble of the 1990s in a series of tweets, and like the crash that ensued in early 2000, said any bursting would see some coins survive, and others fail. 

“The cryptocurrency market has come under fire in recent days, with Bitcoin and Ethereum both sinking lower as a wave of risk aversion sweeps across global financial markets. Although the longer-term outlook for both cryptocurrencies remains skewed to the topside, further losses look likely in the coming days,” DailyFX strategist Daniel Moss said in a note.

Bitcoin was last trading around $34,580, up around 1.65% on the day on the Coinbase exchange.

With the retreat to $35,000, the Bitcoin price is hovering around key technical levels on the charts, and a break above, or below, those levels could pave the way for the next burst towards record highs, or a more protracted decline, analysts said.

“Failing to gain a firm foothold above last week’s close ($38,200) would probably open the door for sellers to drive prices back towards psychological support at $30,000. Clearing that may pave the way for a push back towards former resistance-turned-support at the 2017 high ($19,891), Moss said.

Read more: GOLDMAN SACHS: Buy these 50 under-owned stocks that will roar higher as growth and inflation lift off in 2021

Bitcoin is still a full 95% above where it was a month ago, but the technical charts show that this latest retracement in price this week has brought a number of support levels – a level at which the price should hold in the event of a more aggressive sell-off – into play. 

The Bitcoin price is nearing a key Fibonacci retracement level. Fibonacci retracements are a series of horizontal lines on a chart that show where support and resistance are likely to emerge based on an asset price’s recent highs and lows and a breach of a key line can often trigger a swift move higher, or lower. 

Chris Svorcik, a technical analyst who writes for FXEmpire, said Bitcoin needed to stay above $29,762, which is the half-way point between the low of December 11 and the high on January 12, or 50% retracement, to avoid a drop towards $26,000.

4-hour technical chart of BTC/USD
4-hour technical chart of BTC/USD

“As long as price stays above the 50-61.8% Fibonacci support zone, an uptrend has the best chance of continuing higher (blue arrow) for new high. Only a break below the deep Fibonacci levels would change and invalidate that view,” he said.

Ethereum, which on Wednesday was trading up 2.8% on the day around $1,079 on the Kraken exchange, also finds itself at a tipping point on the technical charts. The price rattled to a three-year high at $1,350 late on Sunday, but its decline since then means it has now surrendered over half of the gains made since the start of 2021, leaving it hovering at a key Fibonacci retracement level.

“Ethereum would need to move through the 23.6% FIB and the pivot level at $1,069 to support a run at the first major resistance level at $1,131,” Bob Mason, a technical analyst who writes for FXEmpire, said. 

“Support from the broader market would be needed, however, for Ethereum to break back through to $1,100 levels,” he said, adding: “In the event of an extended crypto rally, Ethereum could test resistance at $1,250 before any pullback. The second major resistance level sits at $1,212.”

4-hour ETH/USD technical chart
4-hour ETH/USD technical chart

Read more: An ETF provider whose specialty funds have smashed the market breaks down how to capitalize on the red-hot SPAC craze – and shares 4 to watch in 2021

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These are the 2 key technical levels to watch for the stock market in 2021, BofA says

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, New York, U.S., March 11, 2020. REUTERS/Andrew Kelly
A trader works on the floor of the New York Stock Exchange (NYSE) in New York City

  • Two key technical levels in the S&P 500 should be on the radar for all stock market investors in 2021, according to a Monday note from Bank of America.
  • Critical support for the index in 2021 stands at 3,200, representing potential downside of 12% from Monday’s close, BofA said.
  • But secular trends and a bullish cup-and-handle technical analysis pattern suggest the S&P 500 could surge past 4,000 next year, representing potential upside of more than 10%, according to the note.
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US stocks have been on a wild ride in 2020, with a 35% peak-to-trough drawdown in the first quarter followed by an almost 70% rally to new all-time-highs.

Looking to 2021, the evidence remains bullish for stocks to continue their long-term trend upward, according to a technical analyst note from Bank of America. 

“Broadly positive trend, breadth, seasonality, volume, credit, momentum and macro indicators support continued upside into 2021,” BofA’s Chief Equity Technical Strategist Stephen Suttmeier said.

And the move higher in the Dow Industrials and transportation stocks during the second half of 2020 confirms a bull market is on solid footing, according to Dow Theory. 

BofA outlined two critical levels stock market investors should have their eye on next year.

Read more: From Wall Street heavyweights to boutique investment firms, we break down what 7 fund managers and market strategists think about Brexit as the ‘midnight hour’ approaches.

“Big 2021 Support”

First, critical support in the S&P 500 of 3,200. A move to that level from Monday’s close would represent downside potential of 12%. A brief correction in stocks in the fall tested the 3,200 range, which served as a bullish retest of the breakout in stocks over the summer.

“The 3,200 area, which is backed up by the rising 200-day moving average near 3,170 is a big support [level] on a deeper 2021 correction,” BofA said.

“Secular bull market points higher”

The second factor is upside potential. Specifically, BofA has its eyes on 4,000 in the S&P 500, which would represent potential upside of 10% from Monday’s close.

Supporting that potential move higher includes positive seasonality data and a bullish cup-and-handle breakout.

“Historical data suggests that the year after a year with a 10%+ drawdown tends to have stronger returns in the following January, 1Q and for the entire year,” Bank of America said. This seasonality trend could continue in 2021 given the 35% sell-off in stocks in 2020.

And based on presidential cycles, Joe Biden stands to preside over a strong showing for stocks in his first year as president, according to the note.

“First term year 1 cycles show an average return of 7.1%. Democrat first term Year 1 cycles have an average return of 11.4%,” BofA explained.

Finally, a cup-and-handle technical analysis pattern led to a breakout in the S&P 500 over the summer. The measured move target derived from this pattern is 4,270, representing potential upside of 17% from Monday’s close.

“The COVID-19 correction in March and rally into June market the cup and the June consolidation formed the handle of this bullish trend continuation pattern,” said BofA.

While BofA admits it may take until 2022 until this price objective is reached, they did not rule out the possibility of the S&P crossing 4,000 and moving towards that level in 2021. 

Read More: Shark Tank investor Kevin O’Leary told us 2 concrete strategies for building wealth over time – and shared how a rude awakening during the pandemic led him to build a new investing app

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