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(Kitco News) – Volatility spiked in the crypto market on Thursday as a renewed focus on the recently filed spot Bitcoin (BTC) exchange-traded fund (ETF) applications led to an early morning surge that saw BTC climb to its highest price since May 2022, only to fall by thousands of dollars as traders took profits.
Stocks fell under pressure at the market open and continued to drift lower throughout the trading day amid a spike in U.S. Treasury yields and comments from Federal Reserve Chair Jerome Powell that the central bank has not ruled out additional interest rate hikes if needed.
“If it becomes appropriate to tighten policy further, we will not hesitate to do so,” Powell said.
At the market close, the S&P, Dow, and Nasdaq were all in the red, down 0.81%, 0.65%, and 0.94%, respectively. The 10-year Treasury yield spiked to 4.63%, an increase of roughly 10 basis points, and the 30-year Treasury yield spiked to 4.77%, an increase of 12 basis points.
Data provided by TradingView shows that Bitcoin rallied to a daily high near $38,000 on Coinbase, marking the top crypto’s highest price since May 6, 2022. In the time since, BTC has corrected lower, briefly dipping to $35,670 before bulls pushed it back above support at $36,500.
BTC/USD Chart by TradingView
The rally by bulls resulted in “November Bitcoin futures prices [trading] higher and [hitting] a contract high in early U.S. trading Thursday,” according to Kitco senior technical analyst Jim Wyckoff.
Bitcoin futures 1-day chart. Source: Kitco
“The BTC bulls have the solid overall near-term technical advantage and gained more power today, as a price uptrend on the daily bar chart is firmly in place,” Wyckoff said. “Look for more price upside in the near term.”
Crypto investor Scott Melker, host of “The Wolf of All Streets” podcast, said it’s not surprising that BTC corrected at this level because that is where it traded just before the Terra/Luna contagion event of 2022.
$BTC Daily
Tapped the mother of all resistances on the chart and got smacked down. No surprise. That zone is the “before LUNA” level that effectively erases all contagion of 2022 from the picture.
That is a huge area for profit taking. pic.twitter.com/IUAS9Qlndt
— The Wolf Of All Streets (@scottmelker) November 9, 2023
In response to Melker’s post, CoinRoutes co-CEO Dave Weisberger said the $38,000 – $42,000 range, “which was around 35% below the ATH (almost a textbook retracement), lasted around 4 months before failing due to FORCED selling from the Luna debacle.”
He noted that the downtrend continued from there due to a series of cascading bankruptcies by Luna, Voyager, Celsius, BlockFi, and FTX, and suggested that support at that level “would have held” if those bankruptcies, which led to additional force selling, hadn’t happened.
After noting several bullish developments that have happened since then, Weisberger said the early morning rally is but a taste of what Bitcoin has in store in the year ahead.
“My best guess is, like the rally from 28k to 31k on the ‘fake’ Cointelegraph story a couple of weeks ago, this morning’s rally is a glimpse of the future,” he said. “[I don’t know] when, but I don’t expect 38-42k to be significant resistance for a 4-month period, as symmetry would predict. To be clear, I am saying the 4 MONTH range (aka resistance) is unlikely, not a few days or even a few weeks…”
MN Trading founder Michaël van de Poppe also sees the $38,000 – $40,000 range as a pivotal resistance level and doesn’t expect “a breakout in one go.”
“Consolidation beneath is the best, and [the] first test isn’t usually a breaker,” Poppe said. “If a correction occurs -> time to position long.”
In a follow-up post, Poppe identified the range between $31,000 and $33,000 as a good buying opportunity, should BTC price pull back that much.
Pivotal resistance confirmed on #Bitcoin.
The first test isn’t a breakout, it’s usually a rejection, and today showed this.
The range has been defined. $31-$33K are buys if we get that opportunity.
In this range? Play #Altcoins, it’s going to be fun. pic.twitter.com/2EeAtPsD2W
— Michaël van de Poppe (@CryptoMichNL) November 9, 2023
Altcoins correct lower as traders take profits
Profit-taking led to a majority of the tokens in the top 200 recording losses on Thursday.
Daily cryptocurrency market performance. Source: Coin360
Gas (GAS), the token used to pay transaction costs on the NEO blockchain, led the gainers with an increase of 48.7%, followed by a gain of 45.1% for DeXe (DEXE), and an increase of 34.5% for ORDI (ORDI). Tellor (TRB) was the biggest loser, with its price declining by 29%, while SushiSwap fell 14.3%, and Akash Network (AKT) lost 13.7%.
The overall cryptocurrency market cap now stands at $1.38 trillion, and Bitcoin’s dominance rate is 51.9%.
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.
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