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Crypto prices dip, Bitcoin slides to $26,500 amid debt ceiling stalemate

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(Kitco News) - Asset prices continued to face selling pressure on Wednesday as the likelihood of a U.S. default on its debt increases with each passing day that negotiations remain gridlocked. The standoff is increasing the anxiety of investors, who have begun to seek out safe-haven assets as a way to protect their wealth.

Stocks fell under pressure in pre-market trading and remained underwater for the entirety of the trading day. At the market close, the S&P, Dow and Nasdaq all finished in the red, down 0.64%, 0.68%, and 0.64%, respectively.

Data provided by TradingView shows that Bitcoin (BTC) underwent a sell-off in the early morning hours that pushed the top crypto’s price down to support at $26,800. Things got worse as the day progressed, with BTC falling to a daily low of $26,161 in the early afternoon before bulls managed to bid it back above $26,500.

BTC/USD Chart by TradingView

The early morning pullback resulted in a lower price for June Bitcoin futures prices, according to Kitco senior technical analyst Jim Wyckoff, who noted that “ Sideways and choppy trading has been featured recently.”

Bitcoin futures 1-day chart. Source: Kitco

“Bulls and bears are fighting for near-term technical control, with neither having an edge right now,” Wyckoff said. “That suggests more choppy trading in the near term.”

Bearish until BTC to climbs back above $27,600

According to author and veteran commodity trader Peter Brandt, the formation of a pennant on the BTC chart “has short term bearish implications unless negated by close above mid point highs,” which suggests that the price could head lower in the days ahead.

Market analyst Rekt Capital corroborated this outlook, saying that BTC needs to reclaim $27,600 as support before it can “shake off this bear bias.”

“BTC is technically positioned for downside,” Rekt Capital said in a follow-up tweet. “If BTC cannot reclaim $27600 as support soon, BTC will go lower in time.”

As for what price levels to keep an eye on in the event of further downside, MN Trading founder Michaël van de Poppe highlighted $25,800 and possibly $24,900 as potential entry points for a long position, but said he will closely monitor price developments until BTC is able to climb back above $27,500.

No shelter for the altcoin market

All but two tokens in the top 200 were in the red for the day as crypto traders elected to stay out of the market until the debt ceiling drama is resolved.

Daily cryptocurrency market performance. Source: Coin360

Recent meme coin breakout star Pepe (PEPE) suffered the biggest decline in trading on Wednesday, dropping by 9.6% to trade at $0.000001432, while Fantom (FTM), PancakeSwap (CAKE) and Blur (BLUR) all recorded losses of over 9%.

The overall cryptocurrency market cap now stands at $1.1 trillion, and Bitcoin’s dominance rate is 46.2%.

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.