(Kitco News) Prices across the cryptocurrency market climbed higher in trading on Tuesday as the latest Consumer Price Index (CPI) report came in above expectations. The report had little impact on the crypto market but resulted in struggles for the traditional markets.
Following the CPI revelation – which came in at an annual increase of 6.4% versus an expected 6.2% – stocks plunged into negative territory and spent the remainder of the session attempting to claw their way out. At the close of markets in the U.S., the S&P and Dow finished in the red, down 0.03% and 0.46%, respectively, while the Nasdaq managed to finish up 0.57%.
Data provided by TradingView shows that Bitcoin’s (BTC) price whipsawed following the CPI announcement, hitting a low of $51,582 before surging to an intraday high of $22,370 and ultimately settling near support at $22,250.
BTC/USD 4-hour chart. Source: TradingView
The positive move for BTC was proceeded by a rise in Bitcoin futures prices in early trading on Tuesday, according to Kitco senior technical analyst Jim Wyckoff, who noted that “A fledgling price downtrend is now in place on the daily bar chart.”
As it stands now, “The bulls have lost their near-term technical advantage,” Wyckoff said, and warned that “The present path of least resistance for prices is sideways to lower.”
Bitcoin price shows signs of rolling over
While many have taken the performance of cryptos thus far in 2023 as a positive sign that the crypto winter is over, Mike McGlone, senior macro strategist at Bloomberg Intelligence, offered a word of warning that the price action for risk-asset options indicate the market may be undergoing a bear-market bounce while Bitcoin appears to be rolling over.
The primary 1Q risk-asset options appear to be either bear-market bounce or bottoming, and a burgeoning leading indicator – #Bitcoin – may be rolling over. The benchmark crypto is backing away from resistance as the top headwind remains: ‘Don’t fight the Fed.’ pic.twitter.com/k0dWnmbuGi
— Mike McGlone (@mikemcglone11) February 13, 2023
According to McGlone, “Bitcoin reached the steepest discount vs. its 200-week moving average at the end of 2022. This is a top reason for the 1Q snapback, but the global economic ebbing tide still looks unfavorable.” The senior macro strategist went on to note that the trajectory for BTC remains downward, as shown by Bitcoin’s 52-week moving average.
The Federal Reserve and its future actions related to interest rates remain the most influential force in the markets currently, McGlone said, and investors would be wise to take the Fed’s actions into account when making investment decisions.
“Fed tightening despite the risk of recession could be a primary headwind for most risk assets, notably cryptos. Buy and hold strategies may benefit at the expense of the more speculative and leveraged, which are subject to rising volatility typical in bear markets,” McGlone concluded.
Altcoins recover lost ground
The altcoin market was largely in the green in trading on Tuesday as traders looked to shake off the recent FUD and open position in their favorite low-cap cryptos.
Daily cryptocurrency market performance. Source: Coin360
All but six tokens in the top 200 traded higher, led by a 28.78% increase for SingularityNET (AGIX), which climbed to $0.4566. Other notable performances include a 21.47% gain for Hashflow (HFT), a 21.18% increase for Fetch.ai (FET), and a 19.56% gain for MAGIC (MAGIC).
The overall cryptocurrency market cap now stands at $1.028 trillion, and Bitcoin’s dominance rate is 41.6%.
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