Warning Signs for BTC, DOGE, and XRP Emerge Amid S&P 500 Rising Wedge, Market Awaits Inflation Data

Crypto Bulls Face Caution as S&P 500 Shows Bearish Warning

Bitcoin and Ether Bullish, But Macro Risks Loom

Bitcoin (BTC $114,207.77) is showing bullish technicals after confirming an inverse head-and-shoulders breakout, signaling potential upside toward $120,000. Ether (ETH) has followed a similar trajectory, reflecting growing optimism among crypto traders.

Wall Street Signals Caution
U.S. equities are raising red flags. S&P 500 E-mini futures hit a record high of $6,542 since August 1, forming a rising wedge pattern—a classic bearish reversal. Converging trendlines suggest waning bullish momentum, raising the risk of a sharp pullback that could spill over into crypto markets.

Cryptocurrencies often track equity sentiment, meaning a decline in the S&P 500 could pressure BTC and other major assets. Investors will be watching Thursday’s U.S. Consumer Price Index (CPI) data closely. A hotter-than-expected CPI, combined with recent labor market softness, could trigger concerns over stagflation, weighing on risk assets.

The median forecast for August CPI is 2.9% year-over-year, above the Fed’s 2% target and the 12-month average of 2.6%. Core CPI is expected at 3.1%.

BTC and ETH Options Reflect Downside Bias
Deribit 25-delta risk reversals for BTC and ETH are negative to December expiry, indicating demand for downside protection. Put options are priced higher than calls, showing institutional hedging activity. Paradigm reports heavy flows, including the ETH Sep 26 4K put, lifted to 73 volatility.

Altcoin Action: XRP Consolidates, DOGE Surges
XRP remains indecisive, confined within a descending triangle and the Ichimoku cloud, signaling consolidation. A breakout could see XRP test $3.38, though the descending triangle generally favors bears.

Dogecoin (DOGE) shows stronger bullish momentum, reclaiming the June trendline and moving above the Ichimoku cloud. This sets the stage for a potential retest of its July high at $0.2876. However, a rising wedge breakdown in the S&P 500 could limit gains and stall momentum for DOGE.

Bottom Line
While BTC and DOGE technicals appear constructive, macro risks from Wall Street and the upcoming CPI release could create volatility, requiring traders to balance bullish setups with potential downside pressure.