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Bulls rally the troops after Bitcoin briefly dips below $26k

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(Kitco News) - The crypto market spent Monday in defensive mode as Bitcoin (BTC) bulls worked to fend off a bearish push lower that saw the top crypto briefly flirt with support at $26,000 while investors navigate an increasingly perilous global economy.

Stocks also faced selling pressure as last week’s “higher for longer” comments from the Fed combined with the rapidly approaching U.S. debt ceiling to give traders cause to limit their exposure to the markets. At the closing bell, the S&P, Dow, and Nasdaq all managed to finish in the green, up 0.40%, 0.13%, and 0.45%, respectively.

Data provided by TradingView shows that Bitcoin fell under pressure at the opening of the daily candle on Monday, hitting a daily low of $25,985 near midday before bull reinforcements arrived to push it to a high of $26,422. At the time of writing, BTC is trading at $26,392.

BTC/USD Chart by TradingView

“October Bitcoin futures prices [were] lower and hit a one-week low in early U.S. trading Monday,” said Kitco senior technical analyst Jim Wyckoff, who warned that “Bears have the near-term technical advantage.”

Bitcoin futures 1-day chart. Source: Kitco

“That means the path of least resistance for prices will be sideways to lower in the near term – until a solid, bullish technical clue emerges to suggest a near-term market bottom is in place,” Wyckoff said.

MN Trading analyst Gunter Lackmann provided insight into the recent weakness seen in the crypto market in Monday’s issue of the Trade Letter, noting that, “FTX received court approval recently to initiate the liquidation of its substantial cryptocurrency holdings, which were estimated to be worth $3.4 billion.”

Lackmann said that court documents show FTX held over $1.1 billion in Solana (SOL) and approximately $870 million in Bitcoin, Ether (ETH), and Tether (USDT).

“The liquidation process is planned to occur in increments of $50 million to $100 million per week,” Lackmann said. “There is the potential for a significant impact on the market, given that altcoin trading volumes and liquidity are currently at multi-year lows. Even before the court's approval of the liquidation plan on September 13, altcoin prices had already started to drop in anticipation of the potential market impact of these sales.”

Based on the negative pressure these sales will put on the crypto market, Lackmann said he “expects 1-2 weeks of sideways chop, with potential mini ‘fakeouts’ in both directions,” and added that he is mainly interested in seeing “whether the order block continues to hold.”

BTC/USD 1-day chart. Source: MN Trading

“As long as we do not get a confirmed break of this support, it’s simply a waiting game,” he said. “If price action continues to mimic some more of the standard ‘bore them out of the market’ fractals, once (if) things start moving to the upside, the move will be swift.”

Following the early morning sell-off, MN Trading founder Michaël van de Poppe said he’d “be looking at $25,700-25,900 for entries or when we flip $26,800.”

Despite the recent weakness, crypto analyst TechDev posted the following tweet noting that the “3-prong” signal he found that preceded each of Bitcoin's previous all-time-high-setting runs has now been triggered, indicating that the next rally is only a matter of time.

Altcoins start the week mixed

It was a mixed day for the altcoin market with the top 200 tokens evenly split between winners and losers, with most coins trading within ±3% of yesterday’s prices.

Daily cryptocurrency market performance. Source: Coin360

Moonbeam (GLMR) was the standout performer with a gain of 45.45% to trade at $0.245, followed by a 22.87% increase for Loom Network (LOOM) and a 13.57% gain for Storj (STORJ). Akash Network (AKT) had the largest drawdown with a decrease of 6.88%, followed by a loss of 3.7% for Algorand (ALGO).

The overall cryptocurrency market cap now stands at $1.05 trillion, and Bitcoin’s dominance rate is 49%.

By

Jordan Finneseth

For Kitco News

Contact jfinneseth@kitco.com
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.