Crypto market trends higher as Bitcoin runs into resistance at $23,600
(Kitco News) - The overall cryptocurrency market trended higher on Wednesday, with a majority of tokens in the top 100 putting on slight gains, while a positive day in the traditional markets saw the S&P 500, Dow and Nasdaq climb 1.56%, 1.29%
Data provided by TradingView shows that the price of Bitcoin (BTC) rallied 3.75% from a low of $22,805 in the early trading hours to hit a daily high of $23,661 before pulling back to support near $23,400.
BTC/USD 4-hour chart. Source: TradingView
The green day for financial markets follows the much-hyped visit by U.S. House of Representatives Speaker Nancy Pelosi to Taiwan, a trip that generated quite the buzz and aggressive posturing from Beijing over the past week. So far, the response from China has been muted, which has helped embolden traders to remain active in the markets and adopt a more "risk-on" approach.
Outlook for Bitcoin moving forward
The positive gains across the cryptocurrency market over the past couple of months were noted in Wednesday's morning brief from Kitco's senior market analyst Jim Wyckoff, who highlighted the fact that "Prices are still in a six-week-old price uptrend on the daily bar chart, but just barely."
Now is not the time for complacency, however, as a 10% decrease in Bitcoin's 24-hour trading volume hints at a decline in momentum, which prompted Wyckoff to comment that "bulls need to step up and show power soon to keep the price uptrend alive."
Insight into the major support and resistance levels for Bitcoin that traders should keep an eye on moving forward was offered by Twitter user Crypto Tony, who suggested that a close above $23,500 would be a good signal to open a long position while a drop below support at $22,650 might be an opportune time to open a short.
While the positive gains over the past six weeks have been a welcomed sign for the crypto faithful, experienced participants know that market is not out of the woods yet, as previous crypto winters have witnessed bear market rallies that were followed by newer lows.
A historical perspective on when the bottom for BTC might occur was offered by market analyst Rekt Capital, who posted the following tweet, which suggests that the low will occur in Q4 of 2022.
In 2015, #BTC bottomed 547 days before the Halving— Rekt Capital (@rektcapital) August 2, 2022
In 2018, $BTC bottomed 517 days before the Halving (discount March 2020 crash)
If Bitcoin is going to bottom 517-547 days before the upcoming April 2024 Halving...
Then the bottom will occur in Q4 this year#Crypto #Bitcoin
Altcoins close the day mixed
It was a mixed day for the Altcoin market as a large percentage of tokens saw modest gains while Ethereum (ETH) booked a slight decline of 0.37% and Solana (SOL) dipped by 4% following its latest setback.
Daily cryptocurrency market performance. Source: Coin360
|Another setback for Solana as users lose $8 million in assets following the latest exploit|
The top gainers for the day were the layer-two protocol Optimism (OP), the liquid staking platform Lido DAO (LDO) and the proof-of-work protocol Kadena (KAD), which put on gains of 25.62%, 15% and 9.68% respectively.
The overall cryptocurrency market capitalization now stands at $1.083 trillion, and Bitcoin’s dominance rate is 42.1%.