Crypto traders were back in high spirits on Friday as prices were up across the board, with investors jumping back into Bitcoin (BTC) and a multitude of altcoins now that the spot BTC ETF outflows have started to subside – a development that many say marks the local bottom of the recent pullback.
Stocks ended the week mixed after the December PCE index showed that ‘core’ PCE, the Fed’s preferred inflation measure, fell below 3% on an annual basis, the slowest rate of growth since March 2021.
This, combined with the positive estimate on fourth-quarter U.S. GDP released on Thursday, led many investors to adopt a more positive outlook on interest rate cuts as early as March but did little to propel the major indices higher.
At the closing bell, the Dow finished up 0.16%, while the S&P and Nasdaq were in the red, down 0.07% and 0.36%, respectively.
Data provided by TradingView shows that after holding near $40,000 in the early hours on Friday, Bitcoin bulls pushed the price action higher, elevating BTC to $42,255 in the afternoon and back into the middle of the range it has been trading in since early December. At the time of writing, Bitcoin trades at $41,900, an increase of 5.2% on the 24-hour chart.
BTC/USD Chart by TradingView
The move back above $40,000 prompted MN Trading founder Michaël van de Poppe to say there is a “Very significant chance that this is the actual end of the correction on #Bitcoin.”
That said, he also doesn’t see it staging a notable rally higher in the near future and instead sees a bout of sideways trading in the days and weeks ahead.
I've not posted an update on this chart for #Bitcoin in a while.
It's going pretty well as planned.
Now, consolidation will likely occur before continuing to new all-time highs. pic.twitter.com/riAx7Tp9FQ— Michaël van de Poppe (@CryptoMichNL) January 26, 2024
Poppe wasn’t alone in his outlook that Bitcoin will likely trade sideways and choppy for the foreseeable future.
Market analyst Bloodgood noted that “The weekly timeframe shows a test of the $47k resistance which was strongly rejected and even broke down through the $42k level which is not ideal for continuation.”
“Our eyes are glued to the $38k level and we will patiently wait to see the reaction if a retest happens,” he said. “The ultimate level that is a MUST hold for the current bullish scenario to stay intact is $36,500 and that's where my biggest bids are.”
“In spite of the immediate aftermath of the ETF approvals, it should still be obvious that this is an extremely bullish development in the long run,” Bloodgood said. “With much more capital getting the green light to diversify into Bitcoin, I expect that the long-term effects will be reduced volatility and more of a slow but steady grind upwards.”
“This isn’t to say that BTC will become less volatile than the S&P 500, but simply that the way it trades will slowly start to reflect the fact that it is maturing as an asset and becoming far more mainstream,” he added. “Apart from being bullish for the orange coin itself, this kind of change will be amazing for altcoins, with ETH being the obvious next candidate for a spot ETF, while other alts will benefit from the wealth effect and relative stability of BTC.”
Market analyst Crypto Tony posted a tweet reminding his followers that his “two bearish targets on #Bitcoin are $38,000 and $31,000.”
Altcoins climb higher
It was a day of recovery for altcoins as only six tokens in the top 200 recorded a loss.
Daily cryptocurrency market performance. Source: Coin360
SATS (1000SATS) led the field with a gain of 21.45%, while Conflux (CFX) climbed 20.8%, and Sui (SUI) increased by 19.5%. Yesterday’s top gainer, dogwifhat (WIF), led the losers with a decline of 10.5%, while Pyth Network (PYTH) fell 3.8%, and Maker (MKR) lost 2.9%.
The overall cryptocurrency market cap now stands at $1.61 trillion, and Bitcoin’s dominance rate is 51%.
