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STOCK TRADERS EYE BITCOIN, MORE S&P 500 TECHNICAL DAMAGE

Traders are taking note of the continued meltdown in bitcoin BTC=. Indeed, since its October 6 record close, bitcoin has crashed more than 36%. Its losses accelerated on October 10, which marked the largest crypto liquidation in history. Of concern, bitcoin's violent downside turn may also be sparking cross-asset selling to cover losses.

Of note, in the wake of bitcoin's October 6 record close, major 2025 winners have taken hits. Gold XAU= posted its record close on October 20, the S&P 500 index .SPX scored its record close on October 28. The Nasdaq Composite .IXIC, Mag 7 ETF MAGS.K, the S&P Tech Sector .SPLRCT, and Nvidia NVDA.O all hit their record closes on October 29. Indeed, amid the risk-off wave, it's been pretty much all downhill for stocks since.

Thus, since bitcoin has been leading stocks lower, bulls may want to keep a close eye on it to see if it can at least stabilize.

Meanwhile, in the wake of Thursday's sharp downside reversal, which saw the S&P 500 index's daily range as a percentage of its prior day's close, jump to 3.56%, or its highest reading since April 10, the benchmark index ended at 6,538.76, which put it below its 100-day moving average (DMA) (6,544.39) for the first time since May 9. With this, the SPX ended down 5.1% from its record close.

However, on Friday, in the wake of New York Fed president John Williams saying that the Federal Reserve can still cut interest rates "in the near term" without putting its inflation goal at risk, e-mini-S&P 500 futures EScv1 are higher by around 0.5%.

Initial SPX resistance is at the 6,631.44 November 7 low. The 50-DMA, which is now just over 6,650, and Thursday's high, at 6,770.35, now present significant hurdles.

In the event downside pressure resumes, the next support is at the 23.6% Fibonacci retracement of the April-October advance at 6,428.21. The broken log-scale resistance line from 1929, which is now seen as support, is around 6,425.

A fall to the rising 200-DMA, which is now around 6,165, would put the SPX down 10.9% from its record intraday high.

(Terence Gabriel)

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EARLIER ON LIVE MARKETS:

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AND NOW WE'RE TURNING LOWER CLICK HERE

BUNDS MIGHT NOT GET MUCH HELP IF AI STOCKS FALL FURTHER CLICK HERE

EUROPE BEFORE THE BELL, WE WEREN'T AWAY FOR LONG, WHAT HAPPENED? CLICK HERE

MORNING BID: THREE-ALARM FIRE AS TECH SELLOFF RESUMES, TAKAICHI STIMULUS LANDS CLICK HERE

(Terence Gabriel is a Reuters market analyst. The views expressed are his own)