The S&P 500 fell 1.71% on Friday, equating to a loss of nearly $900 billion. At the same time, the Nasdaq decreased 2.2%, which meant up to 650 billion was wiped off of this exchange. A total decrease of $1.5 trillion was the worst day thus far in 2025. It was therefore no surprise that Bitcoin (BTC) was unable to maintain its rally, and has since dropped 2.7%. What could happen next?
S&P 500 trend is still up
Source: TradingView
The weekly chart for the S&P 500 shows the recent big dip in price. That said, If the US traditional markets open solidly on Monday, this dip could just turn out to be a very healthy retest of the $6,000 horizontal support level, as well as the 0.382 Fibonacci. This could even turn out quite bullish.
If the dip does decline further, the 0.618 Fibonacci is below at $5,900, while the 0.786 Fibonacci is at $5,850, together with the bottom of the ascending channel.
The ascending channel has been rising since all the way back in early 2023, and the only recent fall out of this rising channel was the shock caused by the Japanese Carry Trade crisis in early August of 2024.
Therefore, until such time as the price drops out of this ascending channel, the trend is still very much to the upside. With President Trump in favour of the Federal Reserve following a much looser monetary policy, and with servicing of huge debts on the horizon, further currency printing is likely to send assets in the S&P 500 to even greater highs.
Another breakout attempt this week?
Source: TradingView
The short-term time frame for Bitcoin shows that the descending wedge has now broadened out. Within the wedge, the price is still bumping up and down, but this is now taking place along the top of the 0.5 Fibonacci. With momentum indicators looking like they may turn back up again, another shot at the upper descending trendline of the wedge could be attempted by the bulls early this week.
If the bulls do succeed in their breakout attempt, a higher high above $99,500 will be the first target. From there, another higher low must be set, and then the downtrend can be broken.
Weekly bullish divergence
Source: TradingView
Looking at the weekly chart for the price of $BTC, one can see that the previous three weekly candles have the same length top and bottom wicks. This denotes the ongoing battle between the bulls and the bears to gain the upper hand.
It can also be noted that the fall in the Stochastic RSI is diverging from the general rise in price action since the beginning of 2025. This bullish divergence, together with a potential cross-up of the indicators in the Stochastic RSI, could be what fuels the next big rise to the upside.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
