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(Kitco News) – The cryptocurrency market pulled back on Monday as the momentum related to the XRP decision last week and the recent flurry of spot Bitcoin (BTC) exchange-traded fund (ETF) fillings has dissipated while the reality of additional interest rate hikes and other economic headwinds returned to the fore.
China’s latest GDP data showed that the economic recovery in the world’s second-largest economy is slower than expected, which weighed stocks down in the morning. But matters improved in the afternoon as traders refocused their attention on a busy week of earnings in the U.S. At the market close, the S&P, Dow and Nasdaq all finished higher, up 0.38%, 0.22%, and 0.93%, respectively.
Data provided by TradingView shows that Bitcoin bears overwhelmed bulls at the $30,300 support level, resulting in a flash crash to a daily low of $29,787 before dip buyers arrived to push BTC back above $30,000 in the late afternoon.
BTC/USD Chart by TradingView
Kitco senior technical analyst Jim Wyckoff noted that “August Bitcoin futures prices [were] slightly weaker in early U.S. trading Monday” after hitting a contract high last week.
Bitcoin futures 1-day chart. Source: Kitco
“Trading has since turned sideways and choppy at higher levels again,” Wyckoff said. “The bulls have the overall near-term technical advantage but need to move prices above the recent choppy and sideways trading range to gain fresh technical power.”
While the XRP and ETF developments brought fresh optimism to the crypto ecosystem, they weren’t enough to lift BTC above strong resistance at $31,500. As noted by the latest Trade Letter from MN Trading, BTC has been “caught in a tight consolidation range of ~$1500 between 30k and 31.5k” for 24 days straight.
“Bulls believed they were in full control late last week when we saw a 4% run to take out the previous highs in the range of 31.5k and talks of 40k onwards were ripe,” MN Trading analyst Jared Stevenson said. “Alas, the move was short lived, being fully reversed only 12 hours later [with] a 5% move to the downside to take us to the range lows at 30k.”
Since then, there has been little price movement and trading volumes have steadily declined, he said.
“Decision time is likely for Bitcoin in the next week or two,” Stevenson warned. “The longer this range continues to go on the more likely it is for Bitcoin to pick a direction.”
He noted that the “[Relative Strength Index] (RSI) has now triple diverged across the closes of the highs,” and said divergences “are generally very strong indicators of a trend change when occurring.”
“The right way to play this for the entire range would be to be bullish at the range lows (we’re there now) and to hop out/short at the range highs,” he said. “Until we pick a direction that’s my advice. Just be weary, Bitcoin is a ticking timebomb and you don’t want to be caught on the wrong side of the market.”
Altcoins in the red
A majority of altcoins in the top 200 traded in the red on Monday as profit-taking and concerns about the Fed kept many traders on the sidelines for the time being.
Daily cryptocurrency market performance. Source: Coin360
STEPN (GMT) and Celo (CELO) managed to post double-digit gains amid the sea of red, increasing 18.3% and 11.9%, respectively, while Lido DAO (LDO) – the top liquid staking platform by total value locked (TVL) – declined by 10.3%.
The overall cryptocurrency market cap now stands at $1.2 trillion, and Bitcoin’s dominance rate is 48.6%.
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.
