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(Kitco News) - It was a sideways day of price action for the cryptocurrency market as token prices stabilized following Monday’s correction lower while investors anxiously await tomorrow's Consumer Price Index (CPI) reading to get a better gauge on what may come next from the Federal Reserve in regard to interest rates.
Stocks, meanwhile, faced pressure throughout the trading day as debt ceiling talks between President Biden and House Speaker Kevin McCarthy were the focus of attention across financial news channels. At the close of markets, the S&P, Dow and Nasdaq all finished in the red, down 0.46%, 0.17%, and 0.63%, respectively.
Data provided by TradingView shows that Bitcoin (BTC) spent the majority of the day trading within a few hundred dollars of the $27,700 support level, which has served as the battleground for bulls and bears over the past day and a half. This has been a consistent level of support since Bitcoin first climbed above $27,000 on March 17.
BTC/USD Chart by TradingView
According to Kitco senior technical analyst Jim Wyckoff, the stabilizing price of BTC resulted in May Bitcoin futures trading firmer in the early hours on Tuesday.
Bitcoin futures 1-day chart. Source: Kitco
“Prices have fallen to test the key support line, at around $27,000, seen on the chart,” Wyckoff said. “A drop below that support line would give the bears fresh power to suggest a fresh leg down in prices in the near term. Right now, the bulls and bears are on a neutral overall near-term technical playing field.”
A similar outlook was outlined by market analyst Michaël van de Poppe, who posted the following tweet highlighting the rejection at $27,800, which could potentially lead to a retest of the low $27,000 range – a level he sees as a good place to open a long position.
#Bitcoin still chopping around and rejected the level at $27,800 again.
— Michaël van de Poppe (@CryptoMichNL) May 9, 2023
A sweep of the lows would potentially create a bullish divergence and long arguments. #altcoins getting sold off massively. pic.twitter.com/fB8rDlj4XM
And for those worried about an extended correction or further declines, crypto analyst Moustache posted the following chart showing that Bitcoin continues to hold above the 21 Exponential Moving Average, which has historically been a bullish sign.
#Bitcoin (M)??$BTC is still holding the EMA 21 line.
— ????????????????? ?? (@el_crypto_prof) May 9, 2023
One of the most important lines, if you ask me.
Whether you want to hear it or not, but this is bullish. pic.twitter.com/46aLQqVny4
Altcoins show signs of recovery
The altcoin market started to show some signs of recovery on Tuesday as roughly three-quarters of the tokens in the top 200 were in the green for the day.
Daily cryptocurrency market performance. Source: Coin360
Bitcoin SV (BSV) was the top performer with a gain of 36.4% to trade at $40.34, followed by a 15.9% increase for MobileCoin (MOB) and a 12.44% gain for Merit Circle (MC).
The overall cryptocurrency market cap now stands at $1.14 trillion, and Bitcoin’s dominance rate is 47%.
