(Kitco News) – The cryptocurrency market was in consolidation mode on Tuesday as Bitcoin (BTC) continued to hold above $63,000 while most altcoins recorded minor declines amid a slow day in the crypto news cycle.
“Stocks climbed higher [in early trading] on Tuesday, buoyed by falling Treasury yields, as traders sought further indications of when the Federal Reserve might commence rate cuts,” said analysts at Secure Digital Markets. “Following a positive session on Wall Street, investors continue to leverage the momentum from the previous week, bolstered by recent U.S. job figures and Fed Chairman Jerome Powell's dismissal of an imminent interest rate hike.”
But the early rally stalled near midday after Disney’s earnings report disappointed and concerns about interest rates returned to the front of mind for investors.
After briefly dipping into the red, the major indices saw a slight rally into the market close, with the S&P and Dow finishing up 0.13% and 0.08%, respectively, while the Nasdaq lost 0.10%.
Data provided by TradingView shows that Bitcoin traded in a range between $62,815 and $64,445 on Tuesday, with bulls and bears evenly matched for strength, giving neither side the upper hand.
BTC/USD Chart by TradingView
At the time of writing, BTC trades at $63,010, a decrease of 0.5% on the 24-hour chart.
Volatility expected
“Bitcoin has been oscillating between $62,700 and $64,700 since Saturday,” Secure Digital Markets analysts noted. “The ongoing decline in both the US dollar index and the 10-year treasury yield has bolstered the valuation of risk assets. A surge past the $65,000 mark would undoubtedly signal a bullish takeover.”
While BTC is currently in a holding pattern, the analysts noted that the recent rally “has sparked enthusiasm among crypto options traders: the volume of call options significantly outstrips that of puts, suggesting a bullish sentiment in the market.”
“The demand for out-of-the-money call options, with strike prices ranging from $70,000 to $100,000, has notably increased,” the analysts said. “According to data from Deribit, traders have secured over $688 million in call options at the $100,000 strike across various expiries, marking the highest notional open interest on the platform.”
In the spot market, “Buyers stepped in aggressively below $60k, liquidating late shorts,” said market analyst Bloodgood. “The weekly level of $58k-$59k holds for now, however, continuation is needed or else sooner or later we will drop back towards it.”
“The daily level that interests us now is slightly below $65k, which will tell us whether this bounce takes us higher or if we drop back below $60k,” he added.
“On the daily chart, we can see that a clear downtrend is continuing, as a new low was made below $57k,” Bloodgood noted.
“Bulls will want to see a higher high formed, which means that we need to see Bitcoin above $67k, and bears will want to see this daily resistance hold and take us back below $60k,” he said. “It’s going to be a fun week.”
Addressing the broader markets and the forces influencing asset prices, Bloogood said “The macro pendulum just keeps on swinging between hope for a soft landing and dovish Fed policy on the one hand and fears of inflation coming back with a vengeance on the other.”
“Lately the movement has been largely in the direction of fear, as hopes for substantial rate cuts this year began to evaporate, but then the push that bulls needed was the Non-Farm Payrolls (NFP) report that came out on Friday,” he said. “The NFP revealed that the U.S. economy added 175,000 jobs in April 2024, a deceleration from the upwardly revised 315,000 jobs added in March and much lower than market expectations, which anticipated a 243,000 increase.”
“Normally, a weaker job market isn’t what most people would consider great news, but in this context, it’s great for stocks and crypto since it pushes the Fed towards a more dovish approach,” Bloodgood concluded.
Mixed bag for altcoins
It was a mixed day for altcoins with a majority of tokens in the top 200 trending lower.
Daily cryptocurrency market performance. Source: Coin360
AIOZ Network (AIOZ) and Jito (JTO) managed to rise above the noise to post gains of 13.9% and 12.9%, respectively, while Ethena (ENA) climbed 7.2%. Helium was the biggest loser, falling 5.6%, followed by a 5.6% decline for Book of Meme (BOME), and a 5.5% loss for Celestia (TIA).
The overall cryptocurrency market cap now stands at $2.33 trillion, and Bitcoin’s dominance rate is 53.4%.
