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(Kitco News) – It was a day of profit-taking for the cryptocurrency market as traders capitalized on a decline in volatility to lock in the gains from tokens that recently spiked and rotated into coins that have yet to move but have a promising outlook.
Stocks traded mixed as investors pared back their trading activity ahead of the release of October’s Consumer Price Index report on Tuesday, which will provide insight into how the Federal Reserve will move forward with interest rates. Comments from several Fed officials last week signaled that the central bank has kept the door open for more rate hikes, which has dampened the mood of investors who were, at one time, predicting a rate cut.
At the closing bell, the S&P and Nasdaq finished lower, down 0.08% and 0.22%, respectively, while the Dow finished 0.16% higher.
Data provided by TradingView shows that Bitcoin (BTC) bulls attempted to push the price action in the early hours on Monday, but were soundly rejected by bears at $37,450, who then took control of the price action and smacked BTC down to a low of $36,440 in the afternoon.
BTC/USD Chart by TradingView
The strong showing from bears resulted in “November Bitcoin futures prices [trading] weaker in early U.S. trading Monday, but not far below last week’s contract high,” according to Kitco senior technical analyst Jim Wyckoff.
Bitcoin futures 1-day chart. Source: Kitco
“The BTC bulls still have the solid overall near-term technical advantage,” Wyckoff said. “A price uptrend on the daily bar chart remains firmly in place. Look for more steady-higher price action in the near term.”
Gunter Lackmann, an analyst at MN Trading, observed that “Various cryptocurrencies continued to experience a notable surge in trading volume,” in Monday’s issue of the Trade Letter.
“The recent upswing in Bitcoin was supported by speculation that a Bitcoin spot ETF might be introduced before November 17th,” Lackmann said. “Concurrently, Ethereum (ETH) saw an increase following reports of BlackRock submitting an application to the SEC for an Ethereum spot ETF. Two months ago, the overall cryptocurrency market capitalization was at $1 trillion; presently, it has risen to approx $1.42 trillion.”
Total cryptocurrency market capitalization. Source: TradingView
To get a better gauge of relative strength across the market, Lackmann highlighted Bitcoin’s 8-day exponential moving average (EMA).
“It periodically gets tested for support, and we see the upward move stalling from time to time until the 8EMA value catches up with price,” he said.
BTC/USD 1-day chart. Source: MN Trading
“Most recently we broke through $36k and have not yet gotten a retest of the area,” he said. “With the 8EMA at around $36,400, this small range could be utilized for scaling into or adding to long exposure. As we still have a negative divergence between the RSI and PA, if we start seeing candle closes below the 8EMA, especially under $36k, it may be time to become more conservative with longs again until the market shows signs of strength again.”
Lackmann said his “base case is that we will see BTC push at least into the $38.5k – $42k range” before it “retests the previous range high of around $31.5k.”
“I have been gradually taking profits on my long exposure and secured both BTC and altcoin positions with SLs at break even or in profit,” he said. “Don’t let FOMO and greed blind you to the viciousness of the market.”
Market analyst Crypto Tony agreed with this outlook that Bitcoin will eventually have a pullback that takes it down to the low $30,000s, which he sees as a prime opportunity to load up ahead of the next leg higher.
#Bitcoin tops out and comes down to the $32,000 – $31,000, we will have a period of consolidation
This will be your opportunity to load up nicely if you missed the prior run
— Crypto Tony (@CryptoTony__) November 13, 2023
And “The Wolf of All Streets” podcast host Scott Melker also warned that the market looks overheated, with the technical chart showing overbought conditions and a bearish divergence as BTC price approaches the resistance level established by the collapse of Terra/Luna.
$BTC Daily
Reasonable time to expect a cool off, but Bitcoin doesn’t always play by the rules.
Key resistance form LUNA collapse, overbought with bearish divergence.
Be careful. pic.twitter.com/cv6ucqWYx1
— The Wolf Of All Streets (@scottmelker) November 13, 2023
Mixed day for the altcoin market
Altcoins traded mixed on Monday, with a large majority of tokens in the top 200 trading in the red, while nearly a dozen tokens managed to record double-digit gains.
Daily cryptocurrency market performance. Source: Coin360
Memecoin (MEME) led the gainers with an increase of 56.9%, followed by a spike of 21.5% for Worldcoin (WLD), and a 16.3% gain for Bitget Token (BGB). Astar (ASTR) declined by 14.2% to lead the losers, while Injective (INJ) and Blur (BLUR) each fell 12%.
The overall cryptocurrency market cap now stands at $1.4 trillion, and Bitcoin’s dominance rate is 51%.
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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