(Kitco News) - The broader crypto market entered into consolidation on Wednesday as Bitcoin (BTC) continues to trade within the $23,000 support level range – where it has been trading sideways since Jan. 21 – prompting crypto traders to focus their attention on the altcoin market.
In the traditional markets, the prevailing trend was negative as the major indices fell under pressure while Google’s stock plunged 8% after its new A.I. search assistant, Bard, gave a wrong answer that was featured in promotional material. At the close of markets in the U.S., the S&P, Dow and Nasdaq all finished in the red, down 1.11%, 0.61%, and 1.68%, respectively.
Data provided by TradingView shows that Bitcoin got the day off to a hot start, rallying to a high of $23,436 in the early trading hours, only to undergo a 3.2% intraday swing to hit a low of $22,685 before bulls managed to bid it back above $22,900.
BTC/USD 4-hour chart. Source: TradingView
“The price uptrend on the daily bar chart has stalled out,” according to Kitco senior technical analyst Jim Wyckoff, who added that “The bulls do still have the overall near-term technical advantage but need to show fresh power soon to keep the price uptrend alive.”
Analysts at Eight Global, likewise, noted the sideways price action for Bitcoin in their Wednesday market update, highlighting that “BTC has been consolidating around $22-24k for over two weeks without really giving clear signals in which direction it wants to continue.”
Despite the sideways trend, the analysts remain optimistic about where BTC is headed moving forward, stating, “it is fair to say that as long as the price makes higher lows and higher highs, the trend is upwards and we can therefore assume that the price will continue to move upwards from here.”
More than anything, Eight Global stressed that as a trader, “you always want to trade with the trend,” which “means you open longs when the price is in an uptrend, and shorts when the price is in a downtrend.”
For now, Bitcoin remains in an uptrend, but in the event that BTC makes a lower low, “chances are we are going to see a quick retracement as we have little support built up on the way up due to the impulsive moves,” Eight Global warned.
Crypto trader Daan Crypto Trades summed up what many analysts feel is the best course of action in the following tweet, highlighting that right now is a good time to practice the skillful art of patience.
$BTC Middle of the range at the POC with the closest liquidity levels over $500 away to both directions.
— Daan Crypto Trades (@DaanCrypto) February 6, 2023
Good time to chill out and wait patiently. pic.twitter.com/v8KI0s2Gyd
Altcoin market consolidates
The majority of the altcoin market also entered into consolidation in trading on Wednesday following several weeks of significant price gains that helped lift the total market cap back above $1 trillion.
Daily cryptocurrency market performance. Source: Coin360
OriginTrail (TRAC) posted the largest gain on the day, with an increase of 50.89% to trade at $0.44, while Axelar (AXL) climbed 17.36% and BinaryX gained 16.28%. The recently high-flying artificial intelligence-related projects SingularityNET (AGIX) and The Graph (GRT) underwent notable corrections, with their prices decreasing 17.24% and 20.63%, respectively.
The overall cryptocurrency market cap now stands at $1.069 trillion, and Bitcoin’s dominance rate is 41.3%.
