(Kitco News)The weakness present in the cryptocurrency market on Friday carried through the weekend and led to further losses in trading on Monday as multiple recent enforcement actions by the Securities and Exchange Commission have led to a serious case of FUD (fear, uncertainty and doubt) among the crypto community.
Stocks, meanwhile, climbed higher to start the week as investors are cautiously optimistic ahead of tomorrow's Consumer Price Index (CPI) report, which is expected to show that the annual inflation rate has fallen to 6.2% from 6.5% the month prior. At the close of markets in the U.S., the S&P, Dow and Nasdaq all finished the day in the green, up 1.14%, 1.11%, and 1.48%, respectively.
Data provided by TradingView shows that Bitcoin’s (BTC) price began to trend down late on Sunday and continued to trade lower throughout the morning, hitting a daily low of $21,373 shortly after midday before being bid back above $21,600 later in the afternoon.
BTC/USD 4-hour chart. Source: TradingView
The weakness seen in the early hours on Monday resulted in a three-week low in the price of Bitcoin futures, according to Kitco senior technical analyst Jim Wyckoff, who said that the “price uptrend on the daily bar chart has been negated and the bulls have lost their near-term technical advantage.”
As it stands now, “Bears are working on a price downtrend,” Wyckoff concluded.
Bitcoin needs to hold $21,500
While no one likes the sight of declining prices, analysts at Eight Global said that “A correction was due,” and highlighted that this one just so happened to “coincide with yet another regulatory clampdown on the crypto space last week.”
Digging deeper into the data, the Bitcoin chart shows that “after two failed attempts to establish support at $23,500 and the daily 8EMA [exponential moving average], support caved and the price retraced to the $20,800 - $21,700 region,” Eight Global said. The top of the current range is found at the 0.382 fib retracement level and is in sync with the daily 34EMA, “which so far is holding support.”
BTC/USD 1-day chart. Source: Eight Global
“As long as the daily candle closes stay above $21,500 (which is an area of keen interest for futures and margin traders), longs could be favored,” the analysts said. “We may see some wicks to grab liquidity to the south, but as long as $21,500 does not turn into resistance, at least a bearish retest of the $22,500 area is likely, which would give one a chance to secure any longs taken at current levels with a stop-loss order at break-even.”
The likelihood of BTC managing to hold above $21,500 remains in question, however, as crypto market analyst Rekt Captial highlighted in the following tweet, which suggests that BTC is positioned for a downside continuation.
New #BTC Weekly Close occurs below the green level which technically positions price for downside continuation
— Rekt Capital (@rektcapital) February 13, 2023
Especially if the green $BTC level acts as resistance throughout the week#Crypto #Bitcoin pic.twitter.com/LnbLQvqMnv
Crypto market cap falls back below $1 trillion
The vast majority of the altcoin market was in the red on Monday, with only a handful of tokens posting slight gains, while many projects suffered double-digit declines and the total cryptocurrency market cap fell back below $1 trillion.
Daily cryptocurrency market performance. Source: Coin360
The biggest gainer on the day was BinaryX (BNX), which climbed 11.55% to trade at $169.70, followed by a 10% gain for Maker (MKR) and a 9.1% gain for Curve DAO Token (CRV).
The overall cryptocurrency market cap now stands at $997 billion, and Bitcoin’s dominance rate is 41.8%.
