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(Kitco News) – The price action in the crypto market was flat on Wednesday as concerns related to inflation are once again on the rise, partly due to the fact that WTI crude oil is trading near its highest price since November. Rising oil and gas prices have historically put positive pressure on the price of everyday items, leading many analysts to warn that consumers could soon be squeezed even more than they already are.
Stocks traded lower for a second day as persistent concerns about inflation have led many to assume that the Federal Reserve will not be able to lower interest rates anytime soon, and may have to continue to raise rates to achieve their 2% inflation target.
At the market close, the S&P, Dow, and Nasdaq finished in the red, down 0.70%, 0.57%, and 1.06%, respectively.
Data provided by TradingView shows that volatility spiked for Bitcoin (BTC) as its price peaked above $26,000 in the afternoon, only to reverse course and fall to $25,360 before ultimately returning to support at $25,700, leaving its price relatively unchanged on the 24-hour chart.
BTC/USD Chart by TradingView
Kitco senior technical analyst Jim Wyckoff noted that “September Bitcoin futures prices [were] slightly down in early U.S. trading Wednesday,” and said, “Prices Monday hit a 5.5-month low.”
Bitcoin futures 1-day chart. Source: Kitco
“Bears have the firm near-term technical advantage as a price downtrend line is in place on the daily chart to suggest more sideways-to-lower price action in the near-term,” Wyckoff said.
Analysts at MN Trading observed that Bitcoin has been trading in a narrow range since August 18 and said, “Given that we know BTC is on support in the higher timeframes, it makes more sense to consider long positions rather than shorts.”
BTC/USDT 2-hour chart. Source: MN Trading
“The price is respecting the range EQ (the middle of the range) very well, which is why I anticipate BTC will move towards the range low from here,” the analyst said. “If a deviation occurs below the range low, similar to what happened at the range high, I will anticipate with long positions if I get the right confirmations. The setup in the image is just an example and by no means a definitive one. I am patiently waiting to see how price action develops around the range low and will base my actions on that.”
Market analyst Crypto Tony warned that Wednesday’s price action shows that bears are currently in control, so those looking to long the market should remain cautious.
First 4 hour closure below the support zone for 5 days. Shows the bears are in control right now so be cautious if you are long pic.twitter.com/M04BFRfJDj
— Crypto Tony (@CryptoTony__) September 6, 2023
In a separate post, he suggested that Bitcoin could dip to $25,000, followed by a spike up to $28,500 before falling “down to $20,000 for the final correction.”
Technical analyst Mags said that while the concerns about a BTC pullback are warranted, past cycles show that the top crypto has faced similar struggles previously, only to bounce back stronger in the long run.
#Bitcoin ✍️
If you are scared with this pullback you should look at this chart👀
Historically, whenever $BTC reaches the midline of the Donchian Channel, it faces rejection, but then bounces back stronger.💪 pic.twitter.com/Tju5UCM84L
— Mags (@thescalpingpro) September 6, 2023
Muted price action in the altcoin market
The top 200 altcoins were evenly split between winners and losers on Wednesday, with the majority of tokens trading within 3% of yesterday’s prices.
Daily cryptocurrency market performance. Source: Coin360
Worldcoin (WLD) was the biggest gainer with an increase of 18.4%, followed by a 14.2% increase for Enjin Coin (ENJ) and an 8.6% gain for Numeraire (NMR). Centrifuge (CFG) was the biggest loser with a loss of 5.7%, and UniBot (UNIBOT) fell by 4.9%.
The overall cryptocurrency market cap now stands at $1.04 trillion, and Bitcoin’s dominance rate is 48.2%.
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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