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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.

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.

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%.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.