Cryptocurrency prices remain in focus as technical indicators suggest a potential downturn in U.S. stock markets amid an escalating trade war. Bitcoin traded at $90,000 on Thursday, while Chainlink (LINK) and Cardano (ADA) showed relative stability. However, with the Dow Jones index forming a double-top pattern, investors are now questioning the next moves for these key crypto assets.
Dow Jones Forms a Bearish Double-Top Pattern
There is an increasing risk that the Dow Jones index could experience a deeper pullback, which may also impact the broader crypto market. The index has encountered significant resistance at $45,061, failing to break above this level in both December and January.
A double-top pattern is formed by two peaks and a neckline, with the key support level at $41,895. A confirmed breakdown could send the index toward $40,000, representing a 7.12% decline from current levels. A further drop could push it down to $38,800.
Other U.S. stock indices, including the S&P 500, have also exhibited bearish patterns, reinforcing the potential for downside movement.
On the other hand, falling bond yields and a weakening U.S. dollar index could lead the Federal Reserve to step in with interest rate cuts, which might provide support for both stocks and crypto assets.
Bitcoin Price Analysis: Preparing for a Rebound?
Bitcoin has been under slight pressure but remains above the 50-week moving average at $77,140. The price has also cleared the crucial $73,552 resistance, which was the upper side of the cup and handle pattern completed in November.
Currently, BTC is forming a morning star candlestick pattern, suggesting a potential rally above $100,000. However, a drop below $78,620 could invalidate the bullish outlook, signaling renewed bearish pressure.
A key fundamental catalyst is Donald Trump’s proposal for a strategic Bitcoin Reserve, set to be unveiled on Friday. This initiative could significantly influence BTC’s price trajectory.
Cardano Price Analysis: Bullish Breakout in Progress?
Cardano (ADA) appears to be setting up for a major breakout. The coin has moved above the falling wedge pattern, formed between December and February, and successfully retested the upper boundary. Additionally, ADA has retested support at $0.80, the March 2024 high.
If the bullish momentum continues, the initial target for ADA is $1.328, with a further breakout potentially driving it to $2.
Chainlink Price Analysis: Eyeing Key Resistance
Chainlink (LINK) has seen a pullback from its 2023 high of $30, now trading around $16. However, a falling wedge pattern is forming, with LINK developing the handle section of a cup and handle pattern.
The 50-week moving average has provided strong support, suggesting a potential rebound. If the bullish setup plays out, LINK could rally back toward $22.65, a key resistance level.
With the Dow Jones double-top pattern signaling possible weakness in the stock market, cryptocurrencies could face increased volatility. However, Bitcoin, Cardano, and Chainlink are all exhibiting bullish technical formations, suggesting potential breakouts. Traders will be closely watching upcoming Federal Reserve policy decisions and Trump’s strategic Bitcoin Reserve proposal for further direction in the crypto markets.
