This is a daily analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole.

Major cryptocurrencies are looking bullish, with market leader bitcoin BTC$114,140.02 exhibiting a classic inverse head-and-shoulders breakout that could propel it toward $120,000.

But there’s a catch. The daily chart for the S&P 500 E-Mini futures is displaying a bearish pattern, indicating a potential sell-off that could weigh on the cryptocurrency market and trap bulls on the wrong side of the market.

S&P 500 hits record high with rising wedge

The E-mini futures have risen nearly 5% to a record high of $6,542 since Aug. 1. The slow ascent has taken the shape of a rising wedge pattern identified by converging trendlines connecting July 31 and Aug. 15 highs and lows reached on Aug. 1 and Aug. 22.

The converging trendlines indicate that bullish momentum is waning, increasing the likelihood of a sell-off.

When asked to identify and analyze the pattern on the S&P 500 futures, Google Gemini replied, “When a rising wedge, which is a bearish reversal pattern, appears after an extended rally to record highs, it significantly increases the probability of a sharp downside move. It suggests that buyers are exhausted and that the rally is running on fumes. The pattern indicates that the market is setting up for a major trend reversal rather than a simple pullback.”

Cryptocurrencies are known to closely track Wall Street sentiment, which means that a potential decline in the S&P 500 could weigh on bitcoin and other cryptocurrencies.

Inflation eyed

The odds of a breakdown in the S&P 500 could rise sharply if Thursday’s U.S. consumer price index (CPI) prints hotter than expected. Such a result, combined with the recent labor market weakness, may rekindle fears of stagflation—the worst-case scenario for risk assets—putting additional pressure on equities and cryptocurrencies alike.

The median forecast for the U.S. Consumer Price Index (CPI) in August 2025 is a 2.9% year-over-year increase (not seasonally adjusted), according to FactSet. If this estimate holds true, it will be the highest annual rise since January 2025, when the CPI reached 3.0% and well above the Fed’s 2% target. Additionally, this 2.9% figure would surpass the trailing twelve-month average inflation rate of 2.6%.

More importantly, the median estimate (year-over-year, not seasonally adjusted) for the core CPI, which excludes food and energy, is 3.1%.

BTC, ETH options are already biased bearish

The 25-delta risk reversals tied to Deribit-lited bitcoin and ether options were negative out to December expiry, according to data source Amberdata. In other words, short and near-dated BTC and ETH puts traded at a premium to calls, reflecting a bias for downside protection.

A put option protects the buyer from a decline in the value of the underlying asset. A call provides an asymmetric bullish exposure. The 25-delta risk reversal involves the simultaneous purchase of a put option and sale of a call, or vice versa.

According to Options Insights’ Founder, Imran Lakha, the put bias in BTC is likely due to institutions placing long-term hedges. Flows have continued to trend lower on the over-the-counter tech platform Paradigm.

“Flows again featured the [ETH] 26 Sep 4k put, lifted up to 73v,” Paradigm noted.

XRP is indecisive, DOGE looks north

While BTC’s inverse head-and-shoulders breakout suggests a strong bullish direction, XRP’s price action appears indecisive.

The payments-focused cryptocurrency remains locked in a descending triangle and continues to trade within the Ichimoku cloud. Together, these indicators suggest a period of consolidation and uncertainty.

A breakout from the triangle might invite stronger buying pressure, potentially leading to a re-test of $3.38, the swing high from Aug. 8. That said, the descending triangle, by itself, is generally considered a bearish pattern. That’s because the downward-sloping trendline connecting lower highs indicates that sellers are progressively getting stronger and could soon penetrate the horizontal support level.

Speaking of DOGE, it has retaken the bullish trendline from June lows, trapping sellers on the wrong side of the market. Additionally, prices have crossed into bullish territory above the Ichimoku cloud, which suggests scope for a test of the July high of 28.76 cents.

However, traders still need to watch out for a potential rising wedge breakdown in S&P 500 futures, as a reversal there could cap gains in DOGE and weigh on its price momentum.

This is a daily analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole.

Bitcoin: Powell brings bearish lower high

Bitcoin BTC$111,747.10 has retraced to levels last seen before Federal Reserve Chair Jerome Powell’s dovish remarks on Friday, which set expectations for a potential rate cut in September.

At the time of writing, BTC is trading just above $112,000, having peaked at around $117,440 on Friday. Technical scrutiny of the daily chart reveals that the pullback from the $117,000 peak has established a lower high in close proximity to the resistance line defined by the previous bullish trendline originating from the April lows.

This lower high reinforces the prior trendline breakdown, signaling a continuation of bearish price action. Complementing this observation, the Guppy Multiple Moving Average (GMMA) indicator is poised to confirm a bearish momentum shift, highlighted by the imminent crossover of the short-term exponential moving averages (white band) below the longer-term averages (red band).

On the weekly chart, the MACD histogram has initiated the new trading week with a sub-zero reading, highlighting the potential acceleration of downward momentum.

In summary, what do you say about a market that not only resists a sustainable rally on the back of favorable news – such as Powell’s speech – but also maintains a series of bearish technical patterns? I’ll leave it to the readers’ discretion.

Key technical support lies at the $110,756 level, corresponding to the lower boundary of the Ichimoku cloud, with a more substantial support zone marked by the 200-day simple moving average near $100,000. Conversely, reclaiming Friday’s high of $117,440 is essential to resurrect the bullish case.

• Support: $110,756, $100,887, $100,000.
• Resistance: $117,440, $120,000, $122,056.

Ether: Loss of upward momentum

Ether (ETH) printed a doji candle with a prominent upper wick on Sunday, signaling market indecision at record highs. This candlestick pattern forms when the opening and closing prices converge, reflecting a stalemate between buyers and sellers.

However, the relatively long upper shadow, in this case, means that the bull’s attempts to push prices higher faced significant pushback from bears, who managed to pull the price back down before the close.

While the doji itself does not guarantee a reversal, it highlights uncertainty and a possible loss of upward momentum. It warrants caution as it often precedes a potential reversal or a consolidation phase where the market awaits further catalysts for direction.

A pullback appears likely, as the 14-day relative strength index continued to print lower highs over the weekend, contradicting the new price high. The so-called bearish divergence indicates a loss of upward momentum and often yields corrections.

Interestingly, ether traded 3% lower on the day at $4,624 at press time, with charts indicating support at $4,065, the level from which ETH turned higher on August 20.

• Support: $4,065, $4,000, $3,805 (the 50-day SMA).
• Resistance: $5,000, record highs.

Read more: Bitcoin Reverses Powell Spike With a Flash Crash as Options Market Signals Jitters Ahead

Blockchain tracking platform Lookonchain says a crypto trader has turned less than ten thousand dollars into millions in just one month by betting on a crypto project built in the Solana (SOL) ecosystem.

According to Lookonchain, the unidentified trader purchased the native token of the social finance (SocialFi) crypto project Launch Coin on Believe (LAUNCHCOIN) worth approximately $9,075 and turned it into $4.7 million, a 517x return.

Lookonchain further says another trader, pseudonymously known as Pow, has recorded an over 7x return on LAUNCHCOIN.

“From near zero to $2.7 million — absolute legend!

Three months ago, @traderpow spent 1,466 SOL ($367,000) to buy 17.66 million LAUNCHCOIN, only to watch it crash approximately 99%.

But he held on.

Now, with LAUNCHCOIN breaking a $150 million market cap, his 17.66 million LAUNCHCOIN is worth $2.7 million!”

The blockchain tracking platform is also highlighting a trader who recorded a loss running into hundreds of thousands of dollars following a slump in the price of LAUNCHCOIN about three months ago.

“If this trader had been more patient, he could have made $7.3 million instead of losing $800,000.

Three months ago, he bought 45 million LAUNCHCOIN near the top, spending approximately $828,000.

But shortly after, LAUNCHCOIN crashed by over 90%.

He sold all 45 million LAUNCHCOIN (now valued at $8.2 million) for only $29,000 at a loss of $800,000.”

LAUNCHCOIN is trading at $0.191 at time of writing, up by 7,000% from the May 8th low of $0.00269. LAUNCHCOIN currently ranks 316th by market cap, which is slightly over $195 million.

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The structure suggests that bearish momentum may be weakening, allowing buyers to step in. With volume expected to increase upon a breakout, this pattern could mark a pivotal shift for DOT and spark a strong upside move, potentially starting a new bullish phase.

Why The Polkadot Falling Wedge Is Bullish

Crypto analyst Jascrypto recently highlighted that Polkadot has completed a breakout from a multi-month falling wedge pattern. Falling wedges are typically viewed as reversal patterns, and DOT’s successful breakout suggests that downward pressure may be easing after months of consolidation. This structural shift reflects growing optimism and signals that the asset could be preparing for a larger upward trend.

Jascrypto pointed out that DOT is currently testing the 100-day and 200-day Exponential Moving Averages (EMAs), key technical levels that often act as strong resistance in bearish conditions. He emphasized that a decisive daily close above these EMAs would validate the breakout and signal a shift in market sentiment.

According to Jascrypto, if Polkadot maintains momentum and closes above these critical levels, it may pave the way for a rally toward the $5.5 to $6.0 range in the near term. This move would mark a significant recovery phase for DOT, attracting fresh bullish interest from investors.

In an alternative scenario, Jascrypto noted that the worst-case outcome might see Polkadot dipping as low as $3.120 on higher timeframes. However, he added that such a move could set the stage for a much stronger rebound, propelling the price above the $7 mark once momentum returns.

Momentum Indicators Lean Bullish – Is DOT Ready To Run?

Momentum indicators are beginning to align in favor of the bulls, offering promising signals that Polkadot may be gearing up for a meaningful move higher. The 4-hour Relative Strength Index (RSI) has rebounded from oversold territory, hovering near the midpoint around 50. This shift indicates that bearish momentum is fading, and buyers may be gradually regaining control.

Adding to the optimistic trend, the 4-hour Moving Average Convergence Divergence (MACD) has shown a bullish crossover, where the MACD line crosses above the signal line. A move that often marks the beginning of a new uptrend or a pause in prior downside pressure. Combined, the RSI’s recovery and the MACD’s bullish signal suggest that DOT’s momentum is shifting favorably, setting the stage for a potential breakout continuation if price action remains strong.