Bitcoin reclaims support at $21K as bulls take control of the market
(Kitco News) - The cryptocurrency market closed out the week on a strong note as the monthly employment figures in the U.S. saw improvement since the month of September, giving some traders cause for optimism.
The U.S. economy added 261,000 jobs in October and upwardly revised September’s stats from 263,000 to 315,000, according to the Labor Department. The stronger-than-expected results demonstrate the difficulty the Fed will have trying to lower inflation amid a resilient labor market. The central bank previously indicated that bringing inflation down would likely lead to higher unemployment, so the uptick in hires actually points to continued rate hikes.
While the S&P, Dow and Nasdaq all managed to close the day in the green, up 1.36%, 1.26% and 1.28%, respectively, all three major averages were down for the week.
Data from TradingView shows Bitcoin (BTC) underwent a 5.6% midday rally that lifted the top crypto from a low of $20,175 to an intraday high of $21,310 before profit-taking brought it back down to support at $21,000. This was the strongest move above the $21,000 support/resistance zone since Sept. 13.
BTC/USD 4-hour chart. Source: TradingView
The strength showed by the top crypto was mentioned earlier in the day by Kitco senior technical analyst Jim Wyckoff, who noted that the BTC price was “firmer” in trading earlier in the day.
Wyckoff appeared to sense the day's impending move higher when he noted that “The direction in which prices “break out” of the trading range is likely to be the direction of the next significant trending price move.”
“Bulls have the slight overall near-term technical advantage,” Wyckoff observed, “which puts technical odds slightly in favor of an upside breakout from the trading range.”
While the bullish move upwards has excited many in the crypto ecosystem and pushed some to reenter the market, cryptocurrency analyst il Capo of Crypto posted the following message offering a word of caution as this move has been anticipated for some time now.
Ok 21000-21500 has been reached. Now what?— il Capo Of Crypto (@CryptoCapo_) November 4, 2022
This is a very strong resistance zone. Shorts have been getting squeezed, causing this pump. For a trend to last you don't want to see this. Here is where longs get trapped. Here is where you want to be cautious.
A less bearish outlook on where things will go from here was provided by crypto analyst and Eight Global founder Michaël van de Poppe, who posted the following tweet suggesting a few days of consolidation and price pullbacks before BTC once again heads higher.
Altcoins on the rise
The broader altcoin market experienced widespread gains in trading on Friday as the bullish move by Bitcoin prompted traders to come off the sidelines and open new positions.
The top altcoin Ether (ETH) experienced a 6.7% increase to trade at $1,647, while the one exception to the bullishness was Dogecoin (DOGE), which fell 10% on the day after Twitter announced a pause on its work to integrate a crypto wallet.
Daily cryptocurrency market performance. Source: Coin360
The biggest gainer in the top 200 was Loopring (LRC), which gained 40.73% on the day to trade at $0.3977, followed by a 28.31% increase for Spell Token (SPELL) and a 27.65% gain for Ocean Protocol (OCEAN).
The overall cryptocurrency market cap now stands at $1.048 trillion, and Bitcoin’s dominance rate is 38.4%.