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(Kitco News) – The cryptocurrency market saw a drop in prices during trading on Wednesday as several major announcements, including the possibility that Genesis Global Capital will be forced to file for Chapter 11 bankruptcy protection, ended a multi-day rally. As traders take profits, the price rises and is now waiting for a good opportunity to re-enter the market.
Traditional markets also came under pressure as the latest retail sales report showed a slowdown in consumer spending activity along with a cooler-than-expected inflation reading. At the close of markets in the US, the S&P, Dow and Nasdaq fell 1.56%, 1.81% and 1.24%, respectively, to finish in the red.
Data from TradingView shows that Bitcoin (BTC) bulls’ early-morning rally was rejected at $21,646 and it fell to a daily low of $20,415 in a quick 5.72% decline before offering a price above support at $20,800.
BTC/USD 4 hour chart. Source: TradingView
The price pullback was a “normal pause after Tuesday’s four-month high,” according to Jim Wyckoff, chief technical analyst at Kitco, who noted that bulls still have “solid overall near-term technical upside amid a bullish price trend.” daily bar chart.”
“This points to further upside in the near term,” Wyckoff concluded.
Corrective pullback before a bull market
Eight Global’s latest market update report called the possibility of a corrective pullback a likely scenario based on where the price and RSI are trading. According to analysts at Eight Global, $20,000 and $19,500 are the levels to watch now as good spots to look for long opportunities.
“The $19,500 area in particular is of interest both in terms of the horizontal S/R level and the 200-day simple moving average is also currently starting to twist from there,” the update said.
“If a drop occurs, the price may rise to $18,800, so initial stop loss orders (SL) can be placed below. When the price reaches the $20,800 area again, it can break even to secure the SL position or move to take profit,” the analysts noted.
Daan Crypto Trades, a full-time cryptocurrency trader, notes that the current price action for Bitcoin is similar to what was seen in April 2019 and warned those expecting a quick follow-up rally may be disappointed, as price “could be cut here for longer than you think.”
BTC/USDT 1 day chart. Source: TradingView
“We grinded in a small range for a month before seeing a breakout in 2019. Many positions on both sides were disgraced during this cut,” Daan warned.
Market analyst Rekt Capital made a similar observation on this move in April 2019 and wrote a tweet discussing the possibility of a pullback to $17,000.
If this current #BTC the rally really looks like April blast 2019…
— Rekt Capital (@rektcapital) January 18, 2023
The altcoin market is taking a hit
The broader altcoin market also gave back some of its recent gains as only a handful of tokens were in the green while the vast majority booked losses for the day.
Daily cryptocurrency market performance. Source: Coin360
Projects that managed to gain amid the broader market pullback included Kava ( KAVA ), up 9.82% to $1.03, Galxe ( GAL ), up 8.88% and Shiba Inu ( SHIB ), up 6.98%.
The total cryptocurrency market size is currently $975 billion, and Bitcoin’s dominance rate is 41.3%.
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