Bitcoin struggles to hold $23k as global markets fall under pressure
(Kitco News) - The crypto market continued to display resilience and the ability to protect recent gains in the face of worsening economic conditions on Monday as Bitcoin (BTC) managed to hold near $23,000. In contrast, the traditional markets saw a slight pullback as investors evaluate the outlook for interest rates following January's blowout jobs report.
At the close of markets in the U.S., the S&P, Dow and Nasdaq all finished the day lower, down 0.61%, 0.10%, and 1.00%, respectively, while crude oil gained 1.42% to trade at $74.43 and the 10-year bond increased by 2.89%.
Data provided by TradingView shows that an early morning onslaught by Bitcoin bears managed to drop the top crypto to a daily low of $22,657 before bulls managed to reverse the momentum and rally to an intraday high of $23,170. At the time of writing, the two sides once again find themselves locked in a battle for control of the $23,000 support/resistance level.
BTC/USD 4-hour chart. Source: TradingView
Monday’s early morning pullback was “a routine pause after hitting a six-month high last week,” according to Kitco senior technical analyst Jim Wyckoff, who said that “BC bulls still have the firm overall near-term technical advantage as a price uptrend is still in place on the daily bar chart.”
Additional technical insight into Bitcoin’s price action was provided by the analysts at Eight Global, who noted that BTCs price “failed to establish support above $23.5k” and has started the week under the 8EMA (exponential moving average). Last week also began with a Monday candle that closed beneath the 8EMA, but BTC managed to climb above that level on Tuesday and wick as high as $24,300.
“Compared to what we have been experiencing since the beginning of the year, price losing 8EMA support twice in two weeks certainly points to the trend slowing down a bit,” Eight Global warned.
A heatmap of Binance Futures shows that “there is a cluster at around $22.5k, and in comparison, only little liquidity above us, which could be a sign that bears were largely conditioned to stop shorting, and last week’s Powell certainly did not help the bearish bias as much as many were expecting.”
Binance Futures BTC/USD 1-day chart. Source: TradingView
In order to validate a bullish position moving forward, Bitcoin needs to flip $25,500 to support, which could happen later this week “if Powell doesn’t re-release the hawks on Tuesday.”
For a graphical representation of how things may play out in the near term, Eight Global CEO Michaël van de Poppe posted the following tweet highlighting $21,500 as a good entry point for a defensive long position.
#Bitcoin currently on range low and could be bouncing from here.— Michaël van de Poppe (@CryptoMichNL) February 6, 2023
People properly eagerly start to short, so cracking $23.2K is inevitably continuation towards $26-28K on the charts.
Best and defensive long entry; $21.5K. pic.twitter.com/9KdKvvceYl
Altcoins continue to climb higher
Most altcoins in the top 200 experienced positive gains in trading on Monday as the resilience of Bitcoin continues to embolden crypto traders.
Daily cryptocurrency market performance. Source: Coin360
Frax Share (FXS) put on the largest gain of the day, increasing by 27.11% to a price of $12.50, followed by a 17.83% gain for Audius (AUDIO) and a 14.1% increase for Lido DAO (LIDO).
The overall cryptocurrency market cap now stands at $1.068 trillion, and Bitcoin’s dominance rate is 41.5%.