 | Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here! |
(Kitco News) - Asset prices continued to face selling pressure on Wednesday as the likelihood of a U.S. default on its debt increases with each passing day that negotiations remain gridlocked. The standoff is increasing the anxiety of investors, who have begun to seek out safe-haven assets as a way to protect their wealth.
Stocks fell under pressure in pre-market trading and remained underwater for the entirety of the trading day. At the market close, the S&P, Dow and Nasdaq all finished in the red, down 0.64%, 0.68%, and 0.64%, respectively.
Data provided by TradingView shows that Bitcoin (BTC) underwent a sell-off in the early morning hours that pushed the top crypto’s price down to support at $26,800. Things got worse as the day progressed, with BTC falling to a daily low of $26,161 in the early afternoon before bulls managed to bid it back above $26,500.
BTC/USD Chart by TradingView
The early morning pullback resulted in a lower price for June Bitcoin futures prices, according to Kitco senior technical analyst Jim Wyckoff, who noted that “ Sideways and choppy trading has been featured recently.”
Bitcoin futures 1-day chart. Source: Kitco
“Bulls and bears are fighting for near-term technical control, with neither having an edge right now,” Wyckoff said. “That suggests more choppy trading in the near term.”
Bearish until BTC to climbs back above $27,600
According to author and veteran commodity trader Peter Brandt, the formation of a pennant on the BTC chart “has short term bearish implications unless negated by close above mid point highs,” which suggests that the price could head lower in the days ahead.
This is known as a pennant or flag and has short term bearish implications unless negated by close above mid point highs. $BTC pic.twitter.com/kLz6aTHMrz
— Peter Brandt (@PeterLBrandt) May 24, 2023
Market analyst Rekt Capital corroborated this outlook, saying that BTC needs to reclaim $27,600 as support before it can “shake off this bear bias.”
Two weeks ago, #BTC lost ~$27600 as support
— Rekt Capital (@rektcapital) May 22, 2023
Last week, $BTC confirmed this level as new resistance
Price has fully confirmed a breakdown from black & BTC is positioned for downside as a result
Needs to reclaim ~$27600 as support to shake off this bear bias#Crypto #Bitcoin pic.twitter.com/zmtzL8O3lU
“BTC is technically positioned for downside,” Rekt Capital said in a follow-up tweet. “If BTC cannot reclaim $27600 as support soon, BTC will go lower in time.”
As for what price levels to keep an eye on in the event of further downside, MN Trading founder Michaël van de Poppe highlighted $25,800 and possibly $24,900 as potential entry points for a long position, but said he will closely monitor price developments until BTC is able to climb back above $27,500.
#BItcoin lost crucial levels after rejecting at $27.5K.
— Michaël van de Poppe (@CryptoMichNL) May 24, 2023
I wanted it to hold $27K, it didn't.
Scenarios I'm watching;
- Sweep $25.8K for bullish div long play (perhaps $24.9K)
- Reclaim $26.6K or preferably $27.5K = long play for me as then we'll accelerate towards highs. pic.twitter.com/Buan5lzLwf
No shelter for the altcoin market
All but two tokens in the top 200 were in the red for the day as crypto traders elected to stay out of the market until the debt ceiling drama is resolved.
Daily cryptocurrency market performance. Source: Coin360
Recent meme coin breakout star Pepe (PEPE) suffered the biggest decline in trading on Wednesday, dropping by 9.6% to trade at $0.000001432, while Fantom (FTM), PancakeSwap (CAKE) and Blur (BLUR) all recorded losses of over 9%.
The overall cryptocurrency market cap now stands at $1.1 trillion, and Bitcoin’s dominance rate is 46.2%.
