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(Kitco News) - The cryptocurrency market entered into a correction on Monday after the momentum from last week's Ethereum hard fork began to fizzle out, prompting many crypto traders to take profits and look for a good spot to reenter the market at a more opportune time.
In the equities market, stocks fell under pressure in the morning trading session but saw a shift in the afternoon as prices began to climb higher into the market close. At the closing bell, the S&P, Dow and Nasdaq all managed to finish in the green, up 0.33%, 0.30%, and 0.28%, respectively.
Bitcoin (BTC) bears applied pressure on the bulls from the opening candle, successfully hammering BTC below the $30,000 support and dropping it to a daily low of $29,324 near midday before bulls managed to bid it back above $29,500.
BTC/USD 4-hour chart. Source: TradingView
The early morning onslaught from bears resulted in April Bitcoin futures prices trading lower after hitting a new contract high Sunday, according to Kitco senior technical analyst Jim Wyckoff.
But bears still have their work cut out for them as “A price uptrend on the daily bar chart remains firmly in place,” Wyckoff said. “There are no strong, early chart clues to suggest a market top is close at hand. The bulls have the solid overall near-term technical advantage to suggest still more upside in the near term.”
Additional insight was provided in the latest trade letter from Eight Global, which noted that “Bitcoin is retesting its daily 8EMA [exponential moving average] today, and so far finding support.”
BTC/USD 1-day chart. Source: Eight Global
“The 8EMA can be useful when looking for relative strength (and a sustained uptrend) and the lack thereof,” the analyst wrote. “I will be watching the price reaction around the 8EMA this week. There seemingly has been a nice round-top building here at our $30 - 30.5k resistance area. But as long as the price is trading above the 8EMA, no need to go YOLO short yet.”
Eight Global suggested that traders need not worry until two or more daily closes below the 8EMA occur, followed by a struggle to recover the support level. This “would be the first HTF [high time frame] confirmation that a healthy correction may follow shortly (as opposed to an instant dump from above the 8EMA),” they said.
If this occurs, the analysts identified $28,500 - $29,000 as potential support levels to watch and noted that “if the price happens to crash back into the previous price channel, a likely retest of the channel low at around $26.8k” is likely to occur.
“The HTF area which has not been retested yet after the breakout is at around $25 - 25.3k,” the analyst said. “I personally think a retest of that zone would make sense sometime down the road, but currently that’s just a level we should keep in mind, not worry about.”
Should the BTC price climb higher, Eight Global identified $30,000 - $32,600 as the next resistance zone. “For bullish continuation from here, we first would have to see a sustained break above $30.5k, and hold that level at least for a few days, before we can look at the new potential range between $29 - 32.6k,” the analysts said.
Altcoins slide lower
The broader altcoin market entered correction territory alongside Bitcoin while a trio of tokens managed to post double-digit gains.
Daily cryptocurrency market performance. Source: Coin360
Render token (RNDR) was the biggest gainer, increasing 17.13% to trade at $2.05, followed by a 12.87% gain for Audius (AUDIO) and an 11.94% increase for SPACE ID (ID).
The overall cryptocurrency market cap now stands at $1.25 trillion, and Bitcoin’s dominance rate is 45.5%.
