(Kitco News) - The downtrend in the cryptocurrency market that began on Friday extended into trading on Monday as investors await a collection of inflation reports due later in the week that could offer insight into what comes next from the Federal Reserve.
JPMorgan CEO Jamie Dimon’s comments that the U.S. economy is likely to enter a recession in the next six to nine months did little to help investor confidence. The CEO pointed to runaway inflation, big interest rate hikes, and the unknown effects of the Federal Reserve's quantitative tightening policy as indicators of a possible recession.
Data provided by TradingView shows that Bitcoin (BTC) fell under pressure in the early trading hours on Monday, with bears giving the top crypto little room to breathe amid an onslaught of selling that dropped it to a daily low of $19,121 during the afternoon session before bulls bid it back above $19,200.
BTC/USD 4-hour chart. Source: TradingView
The ongoing battle for control was touched on by Kitco senior technical analyst Jim Wyckoff, who noted in his morning update that “Bulls and bears continue to fight for near-term technical control amid quieter and sideways trading, with neither gaining much ground and still on a level overall near-term technical playing field.”
The lack of domination by bulls or bears combined with multiple headwinds and investor uncertainty “suggests more sideways and choppy trading in the near term,” Wyckoff suggested.
For crypto investors looking for more exciting price action, Michaël van de Poppe, founder and CEO of trading firm Eight, suggested they might have to wait another 48 hours or so since markets will most likely “remain unchanged until we'll get all the economic data in on Wednesday and Thursday.”
After that, things could get more interesting due to the fact that the Bitcoin Historical Volatility Index is now below 25. Previous instances when this occurred were followed by a spike in volatility.
A very big move is on the horizon for #Bitcoin, as $BVOL drops sub 25.
— Michaël van de Poppe (@CryptoMichNL) October 10, 2022
Historically, that's a guaranteed recipe for massive volatility.
1; crash to $3K in 2018.
2; break above $4K to $14K in 2019.
3; break above $10K in 2020 (kickstart bull 2021).
C/ @krugermacro pic.twitter.com/QvKXT9Ql28
As for which way the price could head should volatility spike, the dominant consensus on crypto Twitter is that it will be to the downside, with the majority of analysts providing a target between $17,000 and $18,800.
“I think we are wedged in the middle of the bear market with one final capitulation on the way,” Crypto Capital Venture founder Dan Gambardello said. “This means we are nearing the maximum opportunity in crypto. Be ready!”
Markets fall as global headwinds mount
Losses were widespread in trading across global financial markets on Monday as the CBOE Volatility Index (^VIX), which measures short-term expectations for market turbulence, spiked above 32 while US Treasury yields continued to climb higher.
At the close of the markets in the US, the S&P, Dow and Nasdaq all finished in the red, down 0.75%, 0.32%, and 1.04%, respectively.
It was a similar story in the altcoin market, with the vast majority of tokens in the top 200 trading negative on the day.
Daily cryptocurrency market performance. Source: Coin360
Notable exceptions to the far-reaching downturn include a 27% gain for Huobi Token (HT), a 16.85% increase for Maker (MKR), and a 9% gain for Just (JST).
The overall cryptocurrency market cap now stands at $934 billion, and Bitcoin’s dominance rate is 39.5%.
