(Kitco News) – Positive comments from Fed Chair Jerome Powell regarding improvements in the inflation outlook benefited crypto prices in Tuesday trading as Bitcoin (BTC) bulls pushed to reclaim support at $58,000 while the total cryptocurrency market cap increased 2.5%.
Stocks continued to trade near record highs despite giving back some of the gains recorded in the morning. Following the comments from Powell, the odds of a rate cut in September climbed to 73%, up from 68% last week as investors see the improvements but remain cautious ahead of this week's Consumer Price Index (CPI) and Producer Price Index (PPI) reports.
At the closing bell, the S&P and Nasdaq finished in the green, up 0.07% and 0.14%, respectively, while the Dow lost 0.13%.
Data provided by TradingView shows that Bitcoin bulls battled bears throughout the trading day, clawing their way from $56,700 to hit a high of $58,312 and remain locked in a battle for control of the price action as they work to reestablish an uptrend.
BTC/USD Chart by TradingView
At the time of writing, Bitcoin trades at $57,855, an increase of 2.4% on the 24-hour chart.
Signs of a turnaround
Times of volatile price action are when technical and fundamental analysts earn their pay by identifying signs of the next possible move.
According to CryptoQuant analyst Crypto Dan, the Bitcoin Puell Multiple is “generally good for finding the bottom of a bear market, but it is also good for anticipating the end of a correction period within a bull market.”
“The red circled areas are cases where miners' profitability decreases rapidly in a bull cycle and this indicator plummets,” he said. “This indicator fell significantly during the bull cycle in 2016 and 2020, followed by the beginning of Bitcoin's strong rise.”
“Currently, similar movements have been detected,” Crypto Dan said. “Although the exact end of the adjustment period is difficult to be certain, it can be expected that it is not far away. It is likely that we will see the start of a bull rally within the 3rd quarter of 2024.”
Following Bitcoin’s recent dips below $55,000, market analyst Crypto General noted the formation of a double-bottom, and predicted a rally to $64,000 in the near term.
CrypNuevo noticed a similar development and said that for Bitcoin to extend its rally higher, it needs to hold support at the 4h50EMA, which currently sits near $58,000.
$BTC
Potential W pattern forming here.
It needs to go above the 4h50EMA and hold it as support.
Then, price can reach $60k again which can be a strong resistance now. Therefore, I think that long swing positions have to wait until we reclaim that range above $60k again. pic.twitter.com/Dj5nFr74kP— CrypNuevo ? (@CrypNuevo) July 9, 2024
And market analyst Adrian Zduńczyk highlighted a bullish divergence between Bitcoin’s price and RSI that suggests the uptrend will continue.
$BTC BULL DIVERGENCE @ $57.5K? pic.twitter.com/sYuXbakncT
— Adrian Zduńczyk, CMT (@crypto_birb) July 9, 2024
“Yesterday, the German government sold nearly $1 Billion worth of Bitcoin,” noted MN Trading founder Michaël van de Poppe. “Bitcoin has seen some volatility, however, the price is rallying back up as the markets are absorbing the selling pressure. People underestimate how strong #Bitcoin is and what’s going to come.”
Altcoins show signs of recovery
Tuesday saw a strong bounceback for the altcoin market as roughly 90% of tokens in the top 200 recorded gains.
Daily cryptocurrency market performance. Source: Coin360
Mog Coin (MOG) led the field with an increase of 18.1%, followed by a gain of 17% for Sei (SEI), and a 16.8% increase for Celestia (TIA). aelf (ELF) was the biggest loser, falling 6%, while Pepe (PEPE) lost 4.4%, and Axelar (AXL) declined by 3.5%.
The overall cryptocurrency market cap now stands at $2.12 trillion, and Bitcoin’s dominance rate is 53.7%.
