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(Kitco News) – The cryptocurrency market saw a pullback 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 – brought an end to the multi-day streak of price gains as traders booked profits and now await a good opportunity to reenter the market.
Traditional markets also came under pressure as the latest retail sales report showed a slowdown in consumer spending activity to go along with a cooler-than-expected inflation reading. At the close of markets in the U.S., the S&P, Dow and Nasdaq all finished in the red, down 1.56%, 1.81%, and 1.24%, respectively.
Data from TradingView shows that an early morning push higher by Bitcoin (BTC) bulls was soundly rejected at $21,646, which resulted in a rapid 5.72% decline to a daily low of $20,415 before being bid back above support at $20,800.
BTC/USD 4-hour chart. Source: TradingView
The pullback in price was a “normal pause after hitting a four-month high on Tuesday” according to Kitco senior technical analyst Jim Wyckoff, who noted that bulls still “have the firm overall near-term technical advantage amid a price uptrend in place on the daily bar chart.”
“That suggests still more upside in the near term,” Wyckoff concluded.
Corrective pullback before a bull market
A recent market update report from Eight Global called the possibility of a corrective pullback a likely scenario based on where price and RSI were trading. According to Eight Global analysts, $20,000 and $19,500 are the levels to keep an eye on now as good spots to seek out long opportunities.
“Particularly the $19,500 area is of interest, both from a horizontal S/R level perspective and the 200-day simple moving average is also currently starting to curl up from around there,” the update said.
“If a drop happens, the price may wick towards $18,800, so initial stop loss orders (SL) could be placed below. When the price reaches the $20,800 area again, SL can be moved to break even, or into profit, to secure the position,” the analysts noted.
Full-time crypto trader Daan Crypto Trades noticed that the current price action for Bitcoin is similar to what was seen in April 2019 and warned that those expecting a quick follow up rally may be disappointed as the price “can chop around here for much longer than you’d think.”
BTC/USDT 1-day chart. Source: TradingView
“In 2019 we grinded up within a small range for a month before we saw a breakout. Many positions, on both sides, got rekt during that chop,” 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.
If this current #BTC rally is indeed like the April 2019 breakout…
— Rekt Capital (@rektcapital) January 18, 2023
Altcoin market takes a hit
The broader altcoin market also gave back some of the gains it recently captured as only a handful of tokens were in the green while the vast majority booked losses on the day.
Daily cryptocurrency market performance. Source: Coin360
Projects that managed to post gains amid the broader market pullback include Kava (KAVA), which increased 9.82% to $1.03, an 8.88% gain for Galxe (GAL), and a 6.98% increase for Shiba Inu (SHIB).
The overall cryptocurrency market cap now stands at $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 accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.