(Kitco News) – Little changed for the cryptocurrency market over the weekend as Bitcoin (BTC) continued to trade below $63,000 on Monday, with analysts warning that the lack of positive catalysts could see the market take another leg down amid mounting economic concerns.
Stocks saw a volatile day of trading, trending higher at the market open but falling under pressure as the day progressed, with the major indices dipping into the red near midday. The pullback occurred after the U.S. Treasury increased its federal borrowing estimate by $41 billion for the current quarter to $243 billion.
In response to this development, the yield on the 10-year Treasury rallied back to 4.65% after declining to 4.613% earlier in the trading day. It has since trended lower and trades at 4.607% at the time of writing.
At the closing bell, the S&P, Dow, and Nasdaq all finished higher, up 0.32%, 0.38%, and 0.35%, respectively.
Data provided by TradingView shows that Bitcoin (BTC) broke below support at $63,600 in the early hours on Monday and slid to a low of $61,750 in the afternoon before dip buyers arrived to halt the pullback.
BTC/USD Chart by TradingView
The relief rally saw Bitcoin briefly climb back above $63,200, and at the time of writing, BTC trades at $63,070 a decrease of 0.9% on the 24-hour chart.
A key week for economic data
“Bitcoin is currently exhibiting a downtrend with consistent lower highs and lower lows on an intraday chart, bouncing back from today's low at $61,800,” said analysts at Secure Digital Markets. “It remains suppressed below the 20-day and 50-day moving averages, signaling bearish momentum.”
Uncertainty about the future of interest rates is the main source of volatility, they said.
“The blend of sluggish growth and persistent inflation has reduced the likelihood of Fed rate cuts, casting a shadow over risk assets,” the analysts wrote. “A rally above $67,500 would be necessary for the bulls to regain dominance.
A reversal in ETF flows has also put pressure on Bitcoin’s price, translating into weakness across the crypto market.
“Bitcoin ETFs saw significant outflows, totaling $83.6 million last Friday, with Grayscale experiencing $82.4 million in outflows alone. Blackrock faced its third straight day without inflows, painting a rather grim picture,” they noted. “The debut of Bitcoin ETFs in Hong Kong on April 30 has garnered attention among traders. However, the enthusiasm was tempered by news that mainland Chinese investors will be excluded from trading these ETFs.”
Looking at the broader markets, Secure Digital Markets said “The market's focus is on the upcoming corporate earnings, significant labor data, and a Federal Reserve meeting. Notably, Tesla's stock climbed 12% in premarket trading after clearing a significant regulatory hurdle for its full self-driving rollout in China.”
“This week’s earnings spotlight includes major reports from PayPal and Amazon on Tuesday, and from Apple, Coinbase, and Block on Thursday,” they noted. “Monetary policy will also capture the market's attention, with the Federal Reserve expected to maintain interest rates during Wednesday’s announcement. While no change in rates is anticipated, investors will keenly follow Chair Jerome Powell’s remarks at the subsequent press conference.”
“This anticipation builds up to Friday's release of April’s nonfarm payrolls report, a critical indicator of the labor market's strength and a key factor in Fed’s policy decisions and overall economic assessment,” the analysts concluded.
According to economist and crypto trader Milkybull Crypto, the current weakness in Bitcoin could potentially be “the last shakeout before the rally to cycle top.”
“If you observe the 2017 PA when it broke a new ath, there was a healthy and liquidity-grabbed pullback before it rallied to a cycle top,” he said.
“The previous consolidation that started building from Dec 2023 to Feb 2024 also mirrored the current consolidation range,” he added. “The manipulative strategy of MMs is to shake out degenerate STHs who are very sensitive to price correction especially when it is below their cost basis.”
“Liquidity grab zones: $57k-$59k. STH cost basis: $59,788,” Milkybull Crypto concluded. “These are important zones to observe for a final shakeout.”
Altcoins dip as traders wait on the sidelines
Altcoins took a beating amid Bitcoin’s weakness, with all but ten tokens in the top 200 recording losses on Monday.
Daily cryptocurrency market performance. Source: Coin360
Amp (AMP) was the standout performer with a gain of 18.75%, followed by an increase of 6.4% for BinaryX (BNX), and a 5.7% gain for Helium (HNT).
The overall cryptocurrency market cap now stands at $2.32 trillion, and Bitcoin’s dominance rate is 53.3%.
