(Kitco News) - The cryptocurrency market saw a pullback in prices during trading on Wednesday as several major announcements – including the possibility that Genesis Global Capital will be forced to file for Chapter 11 bankruptcy protection – brought an end to the multi-day streak of price gains as traders booked profits and now await a good opportunity to reenter the market.
Traditional markets also came under pressure as the latest retail sales report showed a slowdown in consumer spending activity to go along with a cooler-than-expected inflation reading. At the close of markets in the U.S., the S&P, Dow and Nasdaq all finished in the red, down 1.56%, 1.81%, and 1.24%, respectively.
Data from TradingView shows that an early morning push higher by Bitcoin (BTC) bulls was soundly rejected at $21,646, which resulted in a rapid 5.72% decline to a daily low of $20,415 before being bid back above support at $20,800.
BTC/USD 4-hour chart. Source: TradingView
The pullback in price was a “normal pause after hitting a four-month high on Tuesday” according to Kitco senior technical analyst Jim Wyckoff, who noted that bulls still “have the firm overall near-term technical advantage amid a price uptrend in place on the daily bar chart.”
“That suggests still more upside in the near term,” Wyckoff concluded.
Corrective pullback before a bull market
A recent market update report from Eight Global called the possibility of a corrective pullback a likely scenario based on where price and RSI were trading. According to Eight Global analysts, $20,000 and $19,500 are the levels to keep an eye on now as good spots to seek out long opportunities.
“Particularly the $19,500 area is of interest, both from a horizontal S/R level perspective and the 200-day simple moving average is also currently starting to curl up from around there,” the update said.
“If a drop happens, the price may wick towards $18,800, so initial stop loss orders (SL) could be placed below. When the price reaches the $20,800 area again, SL can be moved to break even, or into profit, to secure the position,” the analysts noted.
Full-time crypto trader Daan Crypto Trades noticed that the current price action for Bitcoin is similar to what was seen in April 2019 and warned that those expecting a quick follow up rally may be disappointed as the price “can chop around here for much longer than you'd think.”
BTC/USDT 1-day chart. Source: TradingView
“In 2019 we grinded up within a small range for a month before we saw a breakout. Many positions, on both sides, got rekt during that chop,” Daan warned.
Market analyst Rekt Capital made a similar observation about the move in April 2019 and posted a tweet discussing the possibility of a pullback to $17,000.
If this current #BTC rally is indeed like the April 2019 breakout...
— Rekt Capital (@rektcapital) January 18, 2023
Then $BTC may not dip into the recent $17000 breakout point (green), even though it is possible from a TA textbook point of view#Crypto #Bitcoin pic.twitter.com/JFC9NqKIeB
Altcoin market takes a hit
The broader altcoin market also gave back some of the gains it recently captured as only a handful of tokens were in the green while the vast majority booked losses on the day.
Daily cryptocurrency market performance. Source: Coin360
Projects that managed to post gains amid the broader market pullback include Kava (KAVA), which increased 9.82% to $1.03, an 8.88% gain for Galxe (GAL), and a 6.98% increase for Shiba Inu (SHIB).
The overall cryptocurrency market cap now stands at $975 billion, and Bitcoin’s dominance rate is 41.3%.
