[S&P500, NASDAQ, and BTC] Can't you all three be bullish please?

Hello everyone. Today we’ve prepared a comparative technical analysis for S&P500, NASDAQ, and Bitcoin in macroscopic perspective by observing daily and weekly charts. Line charts for future commodities from CME were used which are ES1, NQ1!, and BTC1!. Also, in order to observe possible trend reversal signal, RSI indicator with default length of 14 was referred with.

Let’s start with daily charts. S&P500 made a significant high at January 3rd while NASDAQ and Bitcoin made highs about two months earlier: at November 19th and 9th respectively. Let’s have a look at the markets after forming historical highs.

S&P500 bounced up to 0.618~0.786 retracement level of the corrective wave structure and then dropped reaching 1.414~1.618 projection levels. Similarly, NASDAQ retraced up to 0.618 level of the correction and then dropped reaching 1.13~1.272 projection levels. In contrast, Bitcoin was much more bearish only retracing about 0.382 level and then continue to drop quite steeply reaching 0.786~0.886 projection levels.

RSI indicators are also showing some different aspects for Bitcoin, compared to other indices. Both the prices of S&P500 and NASDAQ showed LL(Lower Low) while RSI of these showed HL(Higher Low) during 1/27~6/16 and thus indicating bullish divergence signals On the other hand, both the price and RSI showed LL for Bitcoin which means divergence is no longer valid.

US indices generally showed decent amount of bullish rallies in between corrective waves time to time and bullish divergences appeared as well so some technical dead cat bounce or PRZ(Potential reversal zone) can be expected. However, wave structure for Bitcoin seems to be a bit more bearish due to smaller upward retracements, steeper falling waves, and absence of bullish divergence signal.

Let’s then look at weakly charts which can be interpreted as more macroscopic views. I have selected the lows formed right after COVID19 shock for all these three. As can be observed, Bitcoin went through deeper retracement for about three months (4/12~7/12) throughout the bullish rally towards the historical high. After, even though Bitcoin made a swing high, this dip in the middle affected RSI to be cooled down a little bit pulling RSI down.

Comparing retracement levels of each impulsive waves starting from the COVID19 for these three, 0.382~0.5, 0.5~0.618, and 0.707~0.786 Fibonacci retracement levels have been reached for S&P500, NASDAQ, and Bitcoin respectively. Bitcoin clearly has shown deeper retracement than the US Indices.

Moreover, short-term bullish divergences can be observed on US Indices and mid-term bullish divergences on both NASDAQ and Bitcoin. Weekly charts indicates some signals of possible short-term dead cat bounces for US Indices and some of possible mid-term bounces for NASDAQ and Bitcoin. Personally, I think S&P500 might be a little bearish in mid-term perspective than other two.