Bitcoin slides to support at $23k as rising inflation sparks a run for the exits
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(Kitco News) - Crypto prices continued to trend lower for a third day on Friday as the Fed’s most closely watched inflation measure, the Personal Consumption Expenditures (PCE) price index, came in stronger than expected. This stoked concerns that the central bank will need to raise interest rates faster than previously signaled, leading investors to take a risk-off approach.
The threat of rising interest rates also took a toll on stocks, which were under pressure throughout the trading day and never managed to gain their footing. At the close of markets in the U.S., the S&P, Dow and Nasdaq all finished in the red, down 1.07%, 1.06%, and 1.69%, respectively.
Data provided by TradingView shows that after managing to hold above $23,800 throughout Thursday and into Friday morning, the release of the PCE data was followed by a Bitcoin (BTC) selloff that saw the top crypto hit a daily low of $22,897 before dip buyers arrived to bid its price back above support at $23,100.
BTC/USD 4-hour chart. Source: TradingView
While some viewed the drop with weariness, Kitco senior technical analyst Jim Wyckoff maintained his position that “This week’s sideways price action, or pause, is routine and not bearish.”
According to Wyckoff, “Bulls still have the overall near-term technical advantage as a price uptrend is in place on the daily chart.”
Crypto trader NekoZ held a similar viewpoint that little has changed in the overall outlook, and is expecting a potential drop into the $21,500 region.
No changes for me on $BTC— NekoZ (@NekozTek) February 24, 2023
The market is showing weakness, expecting a move down to 21500 in the mid term.
I won't be shorting, b/c I think theres gonna be some fckery in between. Simply sitting sidelined looking for longs.
Spot holdings have been cut significantly in the past… https://t.co/KeQtV8t919 pic.twitter.com/pxnsTNqiMM
Meanwhile, crypto analyst Moustache has noticed a promising fractal pattern between the current market and 2019 pointing to the potential for a significant rally higher in Bitcoin’s future.
#Bitcoin 2019 vs. #Bitcoin 2023??— ????????????????? ?? (@el_crypto_prof) February 24, 2023
If we continue to follow the $BTC 2019 fractal, the following scenario would make sense. Why?
MA50 & MA200 Cross (D)
LH& HH in the chart, but HH & LH in Stoch RSI
MA50 & MA200 Cross (D)
LH& HH in the chart, but HH & LH in Stoch RSI pic.twitter.com/jbfMiy5na6
Altcoins take a beating
As for now, the crypto market is firmly in correction territory, which means that the losses for the altcoins are generally bigger than that of Bitcoin as they tend to have less liquid markets that respond more intensely to downturns.
Daily cryptocurrency market performance. Source: Coin360
The few exceptions to Friday's widespread weakness were BinaryX (BNX), Pundi X (PUNDIX) and Optimism (OP), which put on gains of 11.21%, 10.95%, and 9.33%, respectively.
The overall cryptocurrency market cap now stands at $1.062 trillion, and Bitcoin’s dominance rate is 42.1%.