Bitcoin, Ethereum, BNB, SP500 and Nasdaq expected to rise before the US midterm

Bitcoin, Ethereum, BNB, SP500 and Nasdaq expected to rise before the US midterm

Since opening last week at 113.07, the Dixie (Dollar Index) is down 2.4%. At 110,657, Dixie could head lower with stock markets rising in what appears to be a bear market rally ahead of the US midterm elections.

After trading in a range for 2 months, Bitcoin
BTC
It is still trapped between the $20,456 resistance and $18,117 support levels, well above the June low of $17,578, which appears to be the bear market low, so far.

Binance coin is also still trapped in a horizontal 10-week range with a low of $255,374 and a high of $300. In addition, Ethereum
ETH
It also falls in the six-week range between $1,215.5 and $1,408.3.

The SP500 formed an inverse head and shoulder pattern, which indicates a possible reversal of the bearish trend that started in January. The closely related Dow Jones indicator has formed a double bottom pattern, which indicates a reversal to the upside as well. The Nasdaq 100 is showing a distorted inverted head and shoulder pattern as well.

The Federal Reserve’s monetary policy has been aggressive this year, with consecutive increases in interest rates since March. The US federal funds rate has been raised four times, from 0.25% in March to 3.25% currently, and is expected to rise higher at the next Federal Reserve meeting next week.

President Biden’s oil plan to use strategic oil reserves to supplement supplies and suppress energy inflation has been impressive this year, although oil prices have remained high with OPEC+ countries not cooperating and instead engaging in production cuts. Oil prices fell from a high of $124 a barrel to $84 between the highs in March and today.

Last week, the president announced a new plan to release an additional 15 million barrels of strategic oil reserves in December. While this is expected to add significantly to downward pressure on inflation, I believe it also benefits his administration politically, as it coincides with the November 8 midterm elections.

With two weeks left until the midterms, the Biden administration can support stock markets to create a positive economic environment to boost midterm opinion polls. If the Democrats win the midterm elections, they could end or slow down aid to Ukraine, and that could spur Biden to pull some cards off his sleeve.

If the Democrats or the Federal Reserve do something to support the stock markets, the strong correlation between the stock and crypto markets could lead to a subsequent rally in Bitcoin and BNB.
BNB
and Ethereum and Ripple, among other currencies.

According to BoFA’s Michael Hartnett, the Fed is petrified of a negative reaction to further rate hikes and could turn quickly to avoid the negative effects of excessive tightening. Conversely, Blackrock warns that any mid-term rally could end quickly because the Fed still has a mandate to aggressively raise interest rates to control the 8.2% high inflation in September.

The assets mentioned in this article are not a recommendation to trade or invest in. Trading and investing in the financial markets involves risks, and you should probably contact a professional investment advisor for investment advice.

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