(Kitco News) - It was a mild day of price action in the crypto market, which has increasingly begun to show signs of decoupling from traditional financial markets as stock prices continue to struggle in the face of mounting economic headwinds.
The major stock market indices were in the red for the day to go along with a 2.62% decline in the US 10-year treasury bond, with the S&P, Dow and Nasdaq closing down 2.11%, 1.54%, and 2.84%, respectively.
Despite the widespread pullback in traditional markets, data from TradingView shows that the price of Bitcoin (BTC) has remained relatively resilient despite a midday attempt by bears to force its price lower, which resulted in a brief dip to $18,856 before bull reinforcements arrived to bid it back above support at $19,400.
BTC/USD 4-hour chart. Source: TradingView
Thursday’s subdued price action is part of a developing trend according to Kitco senior technical analyst Jim Wyckoff, who noted that “Prices have been grinding sideways in a quieter fashion recently” in his morning BTC update.
“This has created a ‘collapse in volatility’ despite keener risk aversion in the general marketplace,” Wyckoff said, adding that “Bitcoin bulls have to be disappointed that prices have not rallied amid the risk-off atmosphere in the markets.”
The damping down of volatility portends that a “bigger price move is on the horizon,” according to Wyckoff, adding that “bears still have the slight overall near-term technical advantage.”
Moving forward, Wyckoff suggested that “A move in BC prices above the September high would empower the bulls to suggest a price uptrend developing, and a move below the September low would recharge the bears and restart a price downtrend.”
A promising on-chain metric
Insight into what the on-chain data for Bitcoin is indicating was provided by Marcus Sotiriou, an analyst for the digital asset broker GlobalBlock, who noted that “on-chain analytics are showing some bullish signs.”
The specific metric that Sotiriou was referring to is Bitcoin’s Cost Basis Analysis, “which compares the LTH (Long Term Holder) realized price with the STH (Short Term Holder) realized price.
Bitcoin on-chain cost basis. Source: Glassnode
As shown on the chart above, the STH realized price (pink line) has only crossed below the LTH realized price (purple line) on three occasions in Bitcoin’s history prior to this past weekend when it crossed again.
“The other occasions this happened, it indicated a bottoming process,” Sotiriou said. “We can keep an eye on when the STH band crosses back over the LTH band to potentially signal a restart in the bull market, if Bitcoin follows the same pattern as previous bear markets.”
Altcoin snoozefest
As mentioned at the open, price action in the crypto market was muted on Thursday, with the vast majority of the top altcoins trading within 1% of yesterday’s prices.
Daily cryptocurrency market performance. Source: Coin360
The biggest gainers on the day include a 16.07% price pop for Orbs (ORBS), a 6.32% gain for Request (REQ), and a 5.08% increase in price for Flow (FLOW).
The overall cryptocurrency market cap now stands at $938 billion, and Bitcoin’s dominance rate is 39.6%.
