Cryptos trade sideways as all eyes are focused on inflation data and the Fed
(Kitco News) - It was another day of sideways price action for the cryptocurrency market as global investors remained hesitant to put money into the markets ahead of upcoming policy decisions in the U.S., including the size of the next interest rate hike from the Federal Reserve.
Investor hesitation was even more apparent in the traditional markets as the major indices saw their second straight day of declines after executives from Bank of America and Goldman Sachs predicted "negative growth" in the first part of 2023 and continued job cuts. As a result of the negative sentiment, the S&P, Dow and Nasdaq all closed in the red, down 1.44%, 1.03% and 2.0%, respectively.
Data from TradingView shows that Bitcoin has been largely unaffected by the concerns facing the traditional market, with its price continuing to trade around support at $17,000 as bulls and bears duke it out for control of the price action.
BTC/USD 4-hour chart. Source: TradingView
In his morning Bitcoin brief, Kitco Senior technical analyst Jim Wyckoff noted the current stalemate in price action, saying “Prices are now pausing but are still in a fledgling uptrend on the daily bar chart.”
Looking ahead, “Bulls have the very slight near-term technical advantage but need to show fresh power soon to keep it,” Wyckoff warned.
Awaiting the CPI data and FOMC
A deeper dive into the Bitcoin market was provided by analysts at TechnicalRoundup, who noted that “the market has been mostly moving sideways between $16,000 and $17,600,” in their most recent newsletter.
After highlighting that Bitcoin’s price is “currently retesting the midpoint of the consolidation around $16,900,” TechnicalRoundup suggested that a move to the range low of $16,000 would invalidate the bullish case, while a move toward $17,600 would invalidate the bearish narrative.
“$18,000-$19,000 and $12,000-$13,900 remain the most relevant levels for larger swing trade ideas, and the market is not trading there at the moment,” the analysts said. “We should hopefully have clearer views once the market moves towards the boundaries of the current consolidation.”
As for what may help move markets to provide a clearer picture, Vetle Lunde, senior analyst at Arcane Research, pointed to the upcoming CPI release and FOMC meeting.
“There are few obvious volatility catalysts in the near term. Still, unexpected contagion related developments may shake up the market, while next week’s U.S.CPI release and FOMC press conference may cause BTC to move,” Lunde said.
Sideways action in the altcoin market
Most altcoins traded within a tight range on Tuesday as crypto traders remain content to observe from the sidelines until a clear signal emerges that it's time to jump back in.
Daily cryptocurrency market performance. Source: Coin360
Notable exceptions to this include a pair of double-digit gainers, with Cartesi (CTSI) seeing its price increase 19.11% to $0.133 while the price of UMA (UMA) climbed 14.62% to trade at $1.95.
The overall cryptocurrency market cap now stands at $851 billion, and Bitcoin’s dominance rate is 38.4%.