Downward arrow for S&P 500 - BTC may be unavoidable

Bitcoin is currently facing a significant potential risk as the U.S. stock market signals weakness. Specifically, the downward arrow from the S&P 500 is likely to trigger a domino effect spreading to the cryptocurrency market. The latest data shows BTC trading at $70.79K with a -7.08% decline over the past 24 hours, reflecting current selling pressure.

S&P 500 Sends Warning Signal with a Downward Arrow

The S&P 500 index representing the U.S. stock market is currently showing concerning short-term signs. Although the long-term trend remains positive (indicated by the red trendline), on shorter timeframes, the price has demonstrated clear weakness. Instead of continuing to rise sharply, the S&P 500 is holding at high levels— a typical action during a distribution phase when large institutions begin selling off to retail investors.

The “drop” arrow pointed out by technical analysts clearly illustrates this scenario: after touching the upward trendline, the price was rejected and only experienced a weak rebound, forming a small consolidation zone. This indicates that buying momentum is no longer strong enough to sustain the rally. When the market cannot continue upward and stalls at the top, there is a very high probability of a sharp decline to offload positions.

Bitcoin Follows When the Stock Market Weakens

The most important point for BTC investors to understand is: Bitcoin has a very strong correlation with the U.S. stock market, especially the S&P 500. When stocks decline, capital usually flows out of risk assets, and this is when Bitcoin often faces selling pressure. In other words, the downward arrow from the S&P 500 is not just a signal for the stock market but also “fuel” that drives Bitcoin to continue falling.

Based on previous technical analyses, the potential support zone for BTC is around 73K-76K. If the S&P 500 indeed drops as forecasted, Bitcoin is highly likely to be pulled down to this range as the “risk-off” sentiment intensifies.

Perfect Short Setup for Those Who Warned in Advance

Currently, a quite “beautiful” short setup is forming from a technical analysis perspective for several reasons. First, the U.S. stock market is clearly showing signs of distribution at high levels. Second, the short-term trend is weakening even though the long-term trend has not been completely broken. Third, Bitcoin could be pulled down as risk-off sentiment appears.

History shows that when the U.S. stock market weakens, crypto tends to struggle to rise sharply and often declines before or more significantly than other assets. Therefore, those who warned about this downward arrow should be prepared for a potential pullback and adjust their trading strategies accordingly.