Bitcoin and S&P 500 Bounce Higher As Sentiment Improves

Bitcoin has been declining for two weeks, breaking below the $57K level late last week, but buyers have reversed the decline and are retesting the previous support from below now. Yesterday the bullish momentum picked up pace as risk sentiment improved in financial markets, with stock indices such as the S&P 500 trying to erase Friday’s losses.

Bitcoin’s rally near $57,000 has returned to Friday’s high of $56,995, which is now acting as resistance. Zooming out, a key challenge for Bitcoin is that its gains during periods of positive risk sentiment aren’t strong enough to counterbalance the losses it incurs on bearish days. This dynamic has led to a series of lower highs and continued downward pressure, signaling that the broader trend remains under strain despite occasional rallies. The inability to sustain gains during risk-positive periods highlights ongoing market weakness for Bitcoin.

Bitcoin Chart Daily – Buyers Retesting the Previous Support at $57K

The major market indices opened strong today, rebounding after a week of steep declines that culminated on Friday. Last week, the NASDAQ dropped almost 6%%, marking its worst performance since 2022, while the S&P 500 slid more than 4%, its sharpest weekly fall since 2020. However, the market shifted today, with the Nasdaq leading a broad recovery as key indices posted notable gains to kick off the new trading week.

Major US Stock Indices Close for Monday:

• S&P 500: Closed up +1.2%, reflecting strong performance across major sectors. Tech, healthcare, and financials led gains, with investor sentiment buoyed by improving economic data and optimism over the Federal Reserve’s next policy moves.
• Nasdaq Composite: Rose +1.1%, driven by strength in technology and growth stocks. Renewed interest in major tech firms contributed to the index’s solid gains, although some concerns remain around future rate hikes.
• DJIA (Dow Jones Industrial Average): Gained +1.2%, with industrials and consumer staples stocks outperforming. Strong earnings reports from several blue-chip companies supported the index’s performance.
• Russell 2000: Closed +0.4%, lagging behind the major indices but still managing a positive session. Small-cap stocks struggled to match the momentum of their larger counterparts, with investors displaying caution around growth prospects in smaller companies.
• Toronto TSX Composite: Finished +1.1% higher, with energy and materials stocks contributing significantly to the rise, reflecting strength in commodities and global demand recovery.

Bitcoin Live Chart