Week by numbers
The past week has seen sideways movement in the crypto market, without a clear trend. The price of the largest cryptocurrency, bitcoin, rose by about one and a half percent, and the price of the second largest cryptocurrency, ether, by about one percent. The total value of the rest of the crypto market (excluding the largest stablecoins) fell by about two tenths of a percent.
As the crypto market moved fairly in sync, despite intra-week fluctuations, there were ultimately no significant changes in bitcoin dominance or the ETH/BTC ratio.
Despite the overall sluggish week, there were both significant price increases and decreases among individual tokens. Among the tokens of Kvarn X trading service, the strongest weekly gains were made by FLOKI (+33%), BONK (+27%), and SUI (+22%). The week's biggest losers, on the other hand, were IMX (-11%), UNI (-10%), and ENA (-5%).
Stock Market Recovers
Over the past week, stock market has been on a strong upward trend. As a result, the S&P 500 index has surpassed two notable thresholds.
First, the trend line drawn from the two previous local tops was broken, which is often one of the first criteria to start to look out for a reversal of the downtrend.
Shortly thereafter, the S&P 500 index also rose above 5500 points.
The 5500-point level can be considered a significant threshold from the perspective that this is the level at which the stock market opened on 3.4.2025, i.e., immediately after Liberation Day.
Having now crossed these first thresholds of a potential new uptrend, what should we be watching next in the development of the index?
Quite close above lies a somewhat interesting cluster of key levels worth monitoring. The first of these include the 50-day moving average at around 5613 points, and the closing price on 2.4.2025—Liberation Day—at around 5670 points. The latter is the level at which the stock market closed just before the announcement of U.S. import tariffs and the trade war that followed.
After these levels, an interesting threshold could be the 200-day moving average (currently around 5746 points), and finally the local top at the end of March, just below 5800 points. If even this last threshold, i.e. 5800 points, were exceeded, the S&P 500 index development would begin to strongly resemble a new bull market.
Within approximately 150 points—or about two and a half percent—there are thus four significant thresholds. The 5650–5800 point area of the S&P 500 index can indeed be seen as a real test, where we may get answers to the question of whether we are currently just in a temporary dip or perhaps on the threshold of a deeper bear market.
In the coming days, interest is strongly focused on the ongoing earnings season. On Wednesday and Thursday, the tech giants Amazon, Apple, Meta, and Microsoft will publish their quarterly earnings. These four companies carry significant weight in the S&P 500 index, and it is expected that the direction of the stock market’s next move may be largely defined by the overall picture drawn from these four earnings reports. The stock market may thus be facing an exceptionally interesting end to the week.
Bitcoin: Already in a New Uptrend?
After the stock market, we turn to examine the price development of the largest cryptocurrency, bitcoin. First, we can make an interesting observation about the differences between the situations of bitcoin and the S&P 500 index.
Above, we set four upside targets for the S&P 500 index: the 50- and 200-day moving averages, the level just before Liberation Day, and the local peak in March. We stated that if all these were surpassed, the development would begin to resemble a strong new bull market.
If we apply these same thresholds to bitcoin’s price, we can see that it has already clearly surpassed them all.
While in the case of the stock market there is still ample basis for interpreting the continuation of a bear market, such arguments are increasingly hard to find for bitcoin.
What should we make of this situation then?
One popular interpretation is that bitcoin functions as the true "risk-on" gauge of the investment market, and its price senses a change in market sentiment first. Whereas the stock market often trudges slowly but steadily upward, bitcoin's price movements upward are often sudden and “stepped.” These one-off steps are then possibly followed by a long consolidation phase before the next step upward.
It would therefore be easy to see the possibility that risk appetite in the market has returned after the early April momentary panic, with bitcoin turning into an uptrend as a manifestation of this, and the stock market in its typical fashion only climbing above the threshold levels at a slower pace than bitcoin.
One may also try to gauge market risk appetite from the relationship between the alt-coin market and the largest cryptocurrency, bitcoin.
The OTHERS/BTC ratio has been in a consistent upward trend for the past two weeks. As long as this trend holds, it points to increasing risk appetite within the crypto market.
Next Weeks Should Be Interesting
In summary, we state that during the past week, the stock market has shown clear recovery from the sharp drop at the beginning of April. However, the drop seen then was so severe that all the rise seen so far could be potentially dismissed as just a “dead cat bounce.” The true test of the stock market’s rally begins from the 5500 points now surpassed by the S&P 500 index and continues up to 5800 points. Until the result of this test is clear, we remain in a sort of “gray area,” where it is advisable to avoid forming firm opinions and instead keep an open mind to both possibilities until the market more clearly shows whether it is ready for a more permanent rise.
The relative strength of the crypto market—and particularly the largest cryptocurrency, bitcoin—in these conditions forms an interesting puzzle for investors. Is bitcoin acting as the “bellwether” of the investment markets, signaling that the direction has already turned upward? This would be a very bullish interpretation. Or is its strength derived from a dual nature as a hybrid of gold and tech stocks, as has recently been suggested? This could mean that bitcoin could remain relatively strong even if market uncertainty resurfaces, gaining support from gold.
At the moment, there are still more questions than answers. It is indisputable, however, that bitcoin has shown exceptional and to many, surprising strength in recent weeks, which gives good reason to follow its price development with particular interest.
With these thoughts, we leave the reader to follow the interesting situation of the crypto markets and the potential reaction to the tech companies' earnings reports.
We will return again next week with the Kvarn Pulse newsletter, so stay tuned!
