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Bitcoin bulls defend $27k as financial markets trade mixed

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(Kitco News) - The cryptocurrency market traded sideways on Monday as token prices remain relatively unchanged from where they were on Friday when Bitcoin (BTC) initially broke below support at $28,000 and hit a low of $27,207.

U.S. equities experienced a mixed trading day as investors await a busy week of earnings from companies like Microsoft (MSFT), Meta (META), Amazon (AMZN), and Alphabet (GOOGL). At the market close, the S&P and Dow finished in the positive, up 0.09% and 0.20%, respectively, while the Nasdaq finished in the red, down 0.29%.

Data provided by TradingView shows that Bitcoin bears attempted to push the top crypto below support at $27,000 in the afternoon but ran out of momentum at $27,040, at which point bulls took control of the price action and bid it back above $27,500.

BTC/USD 4-hour chart. Source: TradingView

As a result of last week's downturn, April Bitcoin futures prices traded slightly lower in early U.S. trading, according to Kitco senior technical analyst Jim Wyckoff, who noted that “Bulls have faded the past week.”

“A price uptrend on the daily bar chart has stalled out,” Wyckoff said, highlighting that the MACD indicator “is also in a bearish posture. Bulls still have the very slight overall near-term technical advantage but need to show fresh power soon to keep it.”

Last week, analysts at Eight Global warned that “if the price happens to crash back into the previous price channel, then a retest of that channel low becomes likely.” That scenario has played out according to this week’s Trade Letter, with Eight Global noting that “we have now cleared three-quarters of the way there.”

“If we see the price make another low towards $26.7k or even $25.3k while a positive divergence develops on the RSI, a local bottom may form,” the analysts wrote, suggesting the price action could develop into an ABC correction pattern. “Depending on where the bottom of this corrective move comes in, we can then start to use the Fibonacci retracement tool to calculate higher possibility levels for long targets and short entries.”

BTC/USD 1-day chart. Source: TradingView

This outlook would be invalidated if BTC makes a new high above $31,050, they said.

If the ABC pattern plays out and the C wave “manages to end at around $24k (yellow trendline + horizontal support), or at least around 21.8k, then there is a chance for bulls carrying price up in H2 towards $48 - 53k, in an ultimate bear market rally right into key Fibonacci retracement zones,” Eight Global wrote.

The analysts suggested that if BTC can manage to rally to those levels in the second half of the year while the economy and stock markets continue to deteriorate, “the ultimate narrative that “crypto decoupled from legacy markets” and “BTC is digital gold” may exactly be what’s needed to have emotional investors long the top of the bear rally.” Eight Global said. “Let’s see if any of this plays out over the next few months.”

Altcoins begin to stabilize

It was a mixed day for the altcoins with a slightly higher number of positive performers compared to those that experienced losses.

Daily cryptocurrency market performance. Source: Coin360

Floki (FLOKI) had the most notable performance on the day as the meme token increased 50% to trade at $0.000043, followed by an 8.9% increase for BinaryX (BNX) and a 7.5% increase for SSV Network (SSV).

The overall cryptocurrency market cap now stands at $1.16 trillion, and Bitcoin’s dominance rate is 45.9%.

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.