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In spite of a most uncertain standoff in the Middle East conflict, the U.S. stock market has just made another new all-time high. Is a resolution to the conflict now priced in? Can the S&P 500 break out of an 8-year ascending channel? Could Bitcoin ride this stock market wave and move to $80K and beyond?
Huge potential breakout for the S&P 500
Source: TradingView
The weekly chart for the S&P 500 shows part of an ascending channel that is several years in the making, therefore the importance of a breakout of the top of this channel cannot be overstated. The current rise in the Index is one of the quickest ever. It will either continue, or this weekly candle will fall back inside the channel.
If the candle stays above the top trendline of the channel and there is a confirmation of the breakout next week, it’s possible that an even bigger move to the upside could be the result.
$BTC price heading back to the top of the bear flag?
Source: TradingView
The short-term time frame chart above reveals that the $BTC price fell through the ascending trendline. The breakdown was confirmed, but since then a W pattern has formed. Just recently the price moved up above the neckline of this pattern. The full extent of the measured move (should it play out) would take the price to just above the bear flag top trendline.
All eyes will be on the U.S. stock market on Friday. A positive weekly close above a multi-year channel could really help to set equities on fire, with a potential blow-off top taking the stock market indices much higher. Bitcoin would be likely to act very favourably in such a bullish climate, but a failed breakout in the S&P 500 would probably result in a similar situation for the $BTC price.
Several barriers to the upside, but golden crosses looming
Source: TradingView
The daily time frame illustrates the barriers that the $BTC price will need to surmount in order to finally change the trend around. Firstly, the bulls will need to push the price out of the bear flag and beyond the $80,000 horizontal resistance level. Next would be a successful break beyond the 200-day SMA. The third obstacle would be the strong horizontal resistance at $90,000, and finally, the last barrier to overcome in order to put the price back into the bull market would be a higher high than the last pivot high at $98,000.
It does need to be considered that these are the major obstacles, and that the price will also meet other significant resistance levels on the way. That said, this gives an idea of the immensity of the task that awaits the bulls.
Among the contributing factors to this potential rally is a cross-up in the daily Stochastic RSI indicators. Also, two golden crosses are in the offing. Currently taking place, is the 50-day SMA crossing above the 100-day SMA. Next would be the cross over of the 50-day SMA above the 200-day SMA.
Bullish monthly time frame
Source: TradingView
A very high time frame view is that of the monthly. Many investors do not go this far out, with most of them content with looking at the weekly for their macro outlook. The above very simple chart tells us much about what could be coming for the $BTC price.
Firstly, we have a major trendline. Begun at the beginning of 2023, it gave support later that year, and then very importantly, it was tagged more recently at the beginning of 2026, which became the base for this current rally. As long as the price holds above this trendline, it would suggest that the bottom is in, and that this can be a durable rally that eventually takes the price back to the all-time high.
It does have to be noted that there is one more possible trendline that is lower down. This would give a bottom of $30,000 if the $BTC price nose-dived down to it from here, but a more realistic place for the price to meet this lower trendline would be at around $40,000.
Going with the more bullish setup, the Stochastic RSI indicator lines have recently crossed up from the bottom. Once they get above the 20.00 level, this should signal huge upside momentum. Are the bulls going to surprise everyone and emerge out of the bear way before the market expects it to happen?
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.
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