Bitcoin (CRYPTO: BTC) was falling about 2.2% lower during Friday’s 24-hour trading session after S&P Global Manufacturing PMI data showed the economy gained strength in December.
Ethereum (CRYPTO: ETH) was losing about 3%, while Dogecoin (CRYPTO: DOGE) was hit more heavily, declining almost 4% at one point before rebounding slightly.
The crypto sector has been retracing since the beginning of this month after a massive rally caused Bitcoin to surge almost 80% between Sept. 12 and Dec. 5, where the apex crypto topped out at $45,000.
Elsewhere, the stock market was mainly flat, with the S&P 500 holding near Thursday’s closing price — a much-needed signal that consolidation may be on the horizon after a multi-day week rally caused the index to gain over 15% beginning on Oct. 27.
Although Bitcoin, Ethereum and Dogecoin showed weakness compared to the stock market in terms of price action, their lower moves were taking place on declining volume, which indicates the crypto sector may be leading the consolidation in stocks.
Traders and investors are likely to be watching the price action on Bitcoin and Ethereum over the weekend for clues as to how the stock market will behave next week. A bullish break in Bitcoin could indicate the Santa Claus rally into the year hasn’t ended, while bearish price action in the crypto sector is likely to provide less directional guidance for the S&P 500.
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The Bitcoin and Ethereum Charts: Bitcoin and Ethereum started to consolidate on Dec. 5 and Dec. 9, respectively, and have each settled into symmetrical triangle patterns on the daily chart. The formation leans bullish in both Bitcoin’s and Ethereum’s case because the cryptos have been trekking higher over larger timeframes.
Bitcoin is set to meet the apex of its triangle on Tuesday, while Ethereum will meet its apex on Dec. 22. Traders and investors can watch for the cryptos to break up or down from the pattern on higher-than-average volume to suggest future direction.
Currently, both Bitcoin and Ethereum have been creating lower highs and higher lows within their triangles. The sideways consolidation has allowed both crypto’s relative strength index (RSI) levels to drop under the 70% mark, which could give Bitcoin…
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