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(Kitco News) – The cryptocurrency market saw prices drop 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 the multi-day streak of price gains as traders took profits and now wait 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 accompanied by a cooler-than-expected inflation reading. As markets close in the US, the S&P, Dow and Nasdaq all closed in the red, down 1.56%, 1.81% and 1.24% respectively.
TradingView data shows that a morning push higher by Bitcoin (BTC) bulls was firmly rejected at $21,646, which led to a rapid 5.72% drop to a daily low of $20,415 earlier to be pulled back above the support at $20,800.
BTC/USD 4-hour chart. Source: TradingView
The price drop was a “normal lull after hitting a four-month high on Tuesday” according to Kitco senior technical analyst Jim Wyckoff, who noted that the bulls “still have the solid overall short-term technical lead in amidst an ongoing upward price trend on the daily bar chart.
“That suggests even more upside in the near term,” Wyckoff concluded.
Corrective retreat before a bull market
A recent market update report by Eight Global called the possibility of a corrective pullback a likely scenario based on where the price and the RSI traded. 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 interesting, both from a horizontal S/R level perspective and even the 200-day simple moving average is currently starting to curl up from there,” the update states.
“If a dip occurs, the price could drop as low as $18,800, then initial stop loss (SL) orders could be placed below that. When the price reaches the $20,800 area again, SL may be moved to break even, or into profit, to secure the position,” the analysts noted.
Full-time crypto trader Daan Crypto Trades noted that the current price movement for Bitcoin is similar to what he saw in April 2019 and warned that those expecting a quick follow-up rally might be disappointed as the price “may be falling here for a lot longer than you think.”
BTC/USDT 1-day chart. Source: TradingView
“In 2019, we stayed within a small range for a month before seeing a breakout. Many positions, on both sides, were rekt during that coup,” Daan warned.
Market analyst Rekt Capital made a similar observation about the move in April 2019 and posted a tweet discussing the possibility of a pullback to $17,000.
The altcoin market takes a hit
The broader altcoin market also gave back some of the gains it recently made as only a handful of tokens were in the green, while the vast majority posted losses on the day.
Daily performance of the cryptocurrency market. Source: Coin360
Projects that managed to post gains amid the broader market decline include Kava (KAVA), which rose 9.82% to $1.03, an 8.88% increase for Galxe (GAL), and an increase of 6.98% for Shiba Inu (SHIB).
The overall cryptocurrency market capitalization is now $975 billion, and Bitcoin’s dominance rate is 41.3%.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee its accuracy. This article is for informational purposes only. It is not a solicitation to effect any exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no liability for loss and/or damage arising from the use of this publication.