US nonfarm payrolls rose 263,000 in September, slightly below the Dow Jones estimate of 275,000, but the unemployment rate eased to 3.5% from an expected 3.7%.
Some analysts believe that the report shows that the labor market remains strong despite the Fed’s efforts to slow the economy, and this could push the Fed to another rate hike at its next meeting in November. This caused US stock markets to plummet on October 7th.
Daily indicators of the cryptocurrency market. Source: Coin360
Although bitcoin (
It traded closely with US stock markets for most of 2022, could turn around in the second half of the year, and bitcoin could turn into risk-free assets like gold and the US Treasury, according to Bloomberg Intelligence, chief commodities strategist Mike. McGlone, 5 May. October Bloomberg Crypto Outlook report.
Let’s study the charts of the S&P 500, the US dollar index (DXY) and major cryptocurrencies to determine a short-term price forecast.
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The S&P 500 (SPX) fell to close below its June low of $3,636 on September 30, but the bears were unable to hold on to the lower levels. Buyers bought the dip aggressively and pushed the price back above the $3,636 breakout level on October 3rd. This may have taken the aggressive bears by surprise and led to a short squeeze, pushing the price towards the 20-day exponential moving average (EMA) of $3,779 on October 4th.
Daily SPX chart. Source: Trading View
In a bear market, experienced traders continue to sell on the rise, which is what happened to the index. The bears stopped the recovery at the 20-day moving average and the price dropped sharply on October 7th.
The area between $3636 and $3584 is vital for bulls protection as a break and close below could signal a resumption of the downtrend. The index could then drop to $3,500 and then to $3,325.
Conversely, if the price rebounds from the support area, this will indicate the accumulation of bulls at the lower levels. Buyers will again try to push the price above the 20-day moving average. If successful, the indicator may rise to the downtrend line.
The bulls will have to overcome this barrier to show that the short-term corrective phase can be completed. The index can then start rising to $4,100.
The US dollar index is still in a strong uptrend. Sellers pulled the price below the 20-day moving average (111) on October 4, but failed to hold on to the lower levels. Sharp buying on dips pushed the price back above the 20-day moving average on October 5th.
Daily DXY chart. Source: Trading View
The bears are trying to stop the bullish movement in the area between the 50% Fibonacci retracement level at $112.41 and the 61.8% retracement level at $112.96. If the price drops sharply from this area, it will mean that traders are selling on the upside. This could bring the price back to the 20-day moving average again and then to $110.05.
If the support at $110.05 disappears, this would indicate a weakening of the bullish momentum in the short term. The price may then fall to an uptrend line. A close below this support may indicate that the indicator may have topped out.
Alternatively, if the bulls push the price above $112.96, the index could retest a multi-year high at $114.77. A break above this resistance could signal a resumption of the uptrend. The next upside target is $117.14.
Bitcoin’s comfortable rally is facing strong resistance in the area between the 50-day Simple Moving Average (SMA) ($20,019) and the descending trendline. This shows that the bears are selling on the rally and will try to bring the price back to $18,626.
BTC/USDT daily chart. Source: Trading View
Frequent retesting of a support level tends to weaken it. If the price breaks below the strong support at $18,626, BTC/USDT could see a shock selloff. This could open the door for a possible retest of the June low at $17,622.
To negate this bearish view, the bulls will have to push the price and keep it above the downtrend line. If this happens, the bullish momentum could pick up and the pair could rise to $22,799. Bears can be a serious challenge at this level.