The S&P Just Retested a Make-or-Break Level (Prepare For What Comes Next)
Bitcoin Roadmap
Friday brought a strong bounce for the S&P 500 after three days of weakness near all-time highs. Here’s what makes this interesting: we briefly broke below a key support level on Thursday before reversing and closing back above it. We can also see confluence with the 200 daily moving average.
That retest matters. We now have a support line that’s been tested twice. The first test created the initial low. The second test confirmed it’s real. A third attempt that breaks through? That’s your serious warning signal.
Right now we’re trading in a clean range. Support is marked. Resistance is clear. We’re sitting in the middle. Think of this as a decision point. Either this consolidation sets up a push to new highs, or we roll over into something bigger.
The good news? The structure is still intact. We’ve been building this base for five or six weeks. That could be your launch pad. Markets have a higher probability of moving up over time, which is why I stay positioned for that outcome.
Gold: End Of A Parabolic Run
The precious metals story is about managing a spectacular run that’s now shifting gears. Last year delivered exceptional returns, and the smart move now is recognizing that parabolic moves need time to cool off.
Looking at how silver and gold have performed from their recent peaks tells you everything. Silver dropped 46% from the highs, while gold declined just 20%. The rotation from the more volatile asset into the steadier one cushioned my portfolio considerably, along with taking profits on the way up.
The allocation shift reflects two things: the continued bull market thesis and the reality that we’re likely entering a consolidation period. Rather than staying aggressive through what could be volatile choppiness, trimming to a 50% allocation in metals made sense. That keeps meaningful exposure to the upside while respecting that the easy money has been made for now.
The immediate path forward is less clear than it was during the trending period. Anyone claiming certainty about the next move is probably overconfident.
Some analysts who missed the entire move are calling for a crash. Others who rode it up don’t want to acknowledge any weakness. The balanced view is simpler: we made excellent returns over the last year, rebalanced at the right time, and we’re now positioned for both scenarios.
Looking at the bigger picture, retracing a few months after a multi-year climb isn’t much. It’s actually typical for precious metals after parabolic moves. That kind of reset sets up the next leg higher, because the secular bull market in gold likely has several more years to run through the end of the decade.
Bitcoin: Managing the Decline
Bitcoin just went through a brutal selloff, dropping all the way to 60,000 and testing both the 200 day moving average and the 2021 highs before bouncing back to 69,000. This is the first major down move in what’s likely a longer downtrend.
The monthly chart shows five red candles in a row. We might close this month green and create the illusion that the bottom is in, but the bigger picture suggests this is just the initial leg down. We’ll probably see a relief rally, maybe it’s already developing, before rolling over into a deeper low.
What’s notable is how Bitcoin has completely disconnected from equity markets, which are still near all-time highs. If stocks enter a downtrend this year as I expect, Bitcoin won’t escape that pressure. The correlation may be weak right now, but when broad risk off sentiment takes hold, crypto assets typically get swept up in the selling.
After such a sharp drop, a counter trend bounce makes sense. But the intermediate outlook remains cautious, and more downside is likely before this bear market ends.
Thanks for reading.
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Written by Timothy Assi, an Elite Popular Investor on eToro.
Not investment advice. eToro is a multi-asset investment platform. Your capital is at risk. For information and educational purposes only.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
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