US stock markets are showing the same signs of stagnation as they did before the Great Recession of 2007 and 2009. If history repeats itself, the collapse of #Bitcoin could wipe out hopeful investors who were expecting a continuation of the bull run.

$BTC fell 7% last week, but is currently trading at a key psychological level. However, the US stock market is showing signs of exhaustion, which could affect #btc and the broader financial markets.

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Despite being considered an uncorrelated asset, BTC is positively correlated with US stock markets and liquidity cycles. The Bitcoin price is also very sensitive to Western macroeconomic policies.

As seen in the image below, just before the US Federal Reserve’s interest rate cut decision on September 18, the S&P500 Index recouped losses in a v-shape, showing a false sense of strength before financial markets crashed. Interestingly, the Fed is scheduled to make a decision on interest rates on September 18, similar to 2007. Moreover, the S&P500 saw a similar v-shaped recovery between August 5-30.

The weekly chart also visualizes the formation of multiple bearish crossovers on the Relative Strength Index (RSI) and the Awesome Oscillator (AO). This technical formation occurs when the price makes higher highs without confirming the increasing momentum. Instead, the momentum makes lower highs, leading to a divergence.

Bitcoin price has been consolidating below its 2021 ATH for the sixth month in a row. Usually, consolidation below a significant hurdle is a bull market.

In this case, the Relative Strength Index (RSI) is trading above the 50 average level after turning down from overbought conditions, indicating a bearish reversal. Additionally, the Awesome Oscillator (AO) has dropped below the 0 average level, indicating a momentum shift in favor of the bear market.