Crypto Faces Bull Trap Risk as U.S. Equities Signal Caution
Bitcoin and Ether are showing bullish technical setups, but macroeconomic signals suggest traders should remain cautious.
BTC, ETH Advance Amid Equity Market Headwinds
Bitcoin (BTC $114,207.77) recently completed an inverse head-and-shoulders breakout, hinting at a potential push toward $120,000. Ether also climbed, reflecting broader strength in the crypto market.
However, the S&P 500 E-mini futures have formed a rising wedge at record highs ($6,542), a bearish pattern that indicates slowing upward momentum. A pullback in equities could pressure cryptocurrencies, particularly if U.S. CPI data later today surpasses forecasts. Analysts expect August CPI at 2.9% YoY and core CPI at 3.1%, both above the Fed’s 2% target.
Options Data Signals Downside Protection
BTC and ETH 25-delta risk reversals remain negative for December expiries, showing institutional demand for downside hedges. Large ETH put flows and persistent protection-seeking behavior suggest traders are bracing for potential short-term corrections.
Altcoins: XRP Consolidates, DOGE Surges
XRP remains range-bound within a descending triangle and the Ichimoku cloud, indicating indecision. A breakout above $3.00 could set the stage for a test of $3.38. Dogecoin (DOGE $0.2509) reclaimed its bullish trendline from June and broke above the Ichimoku cloud, pointing to potential gains toward its July highs of $0.2876. Still, broader market volatility tied to the S&P 500 could limit further upside.
Outlook
While BTC and DOGE show bullish momentum, macro conditions—including U.S. inflation data and equity market patterns—pose risks that could trap bullish positions. Traders are advised to monitor key resistance levels and institutional flows closely.
