(Kitco News) – Financial markets ended the week struggling to hold on to recent gains after Fed Chair Jerome Powell deflated the positive sentiment bubble by saying that the Fed is now taking a wait-and-see approach on future interest rate cuts.
“The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said on Thursday, sparking a decline in the odds of a 25 basis point cut in December. The CME FedWatch Tool now shows Wall Street gives a 62% for a rate cut next month, down from 72% the day before.
Stocks fell under pressure at the market open and continued to drift lower throughout the day as traders moved to limit their exposure amid rate cut uncertainty. At the closing bell, the S&P, Dow, and Nasdaq were all in the red, down 1.32%, 0.70%, and 2.24%, respectively.
Spot gold consolidated around $2,560/oz, and at the time of writing, trades at $2,561/oz for a decline of 0.14% on the session.
After falling to a low of $86,700 late on Thursday, Bitcoin (BTC) bulls reengaged bears and managed to push King Crypto back above $90,000 on Friday afternoon and look determined to extend the rally into the weekend.
BTC/USD Chart by TradingView
The early weakness in Bitcoin has largely been attributed to selling by ETF holders, but with crypto sentiment rising, analysts see a bounceback in demand ahead.
“The ETF scene didn’t do us any favors, with Bitcoin ETFs bleeding out a hefty $400.7 million, making it the third-worst outflow since they launched in January,” noted analysts at Secure Digital Markets. “These ETF dips are probably due to traders cashing in after Bitcoin’s latest skyward sprint. Despite the constant selling, we keep seeing bids pile up in the order book as investors keep buying the dip.”
Despite the recent outflows, Bitcoin ETFs have still blown away all expectations, with Bloomberg ETF analyst James Seyffart noting that U.S.-listed BTC ETFs now hold approximately 1.07 million BTC.
US Spot #Bitcoin ETFs now own an estimated ~1.07 million BTC. As a group they're likely to pass Satoshi's estimated holdings of ~1.1 million BTC in the next few days or weeks pic.twitter.com/AKD7EBYPIZ
— James Seyffart (@JSeyff) November 14, 2024
According to 13F filings released over the past quarter, 206 companies listed in the U.S. with over $100 million in assets invested have confirmed ownership of spot Bitcoin ETF shares with the SEC. Notable names include JP Morgan Chase, Goldman Sachs, Bank of Canada, HSBC, Morgan Stanley, Bank of America, UBS Group, and the State of Michigan Retirement Fund.
Crypto sentiment is also back on the rise after 18 states filed a lawsuit against the Securities and Exchange Commission (SEC) and Chair Gary Gensler over “gross overreach” in their enforcement actions against the cryptocurrency industry.
“They want to shake up how digital assets get regulated,” Secure Digital Markets analysts said regarding the lawsuit. “There are rumors online stating that the SEC Chair Gary Gensler might be considering a resignation. Michael Saylor took the opportunity to say that replacing SEC Chair Gary Gensler is ‘incredibly bullish for digital assets [...] It's very good for the crypto industry. We're going to see a lot more pro-Bitcoin policies.’ He also added that he believes the U.S. government should and will build a strategic Bitcoin reserve.”
At the time of writing, Bitcoin trades at $91,365 for an increase of 3.84% on the 24-hour chart.
Consolidation before the bull rally continues
By and large, analysts across the crypto ecosystem see the current pullback and consolidation by Bitcoin as temporary, with many calling for a $100,000 BTC price before the end of November.
“Bitcoin (BTCUSD) has had an enormous bullish break-out to new All-Time Highs (ATH) following last week's U.S. elections,” wrote TradingView analyst TradingShot. “The past 2 days have seen this massive rally turn sideways, and as always, a certain part of market participants have started calling for big corrections or even bear markets. Once again, we will let simple charting show why this sideways price action is nothing but a short-term and mostly necessary consolidation.”
“This analysis is a comparison of BTC's October 2020 - April 2021 rally with October 2024 - today,” he explained. “We've made ideas regarding those time periods in the past, but this time we bring a more aggressive picture on the 1D time frame.”
“As you can see, on both fractals, the 1D RSI started with a Channel Up while the price was still trading sideways/consolidating within the 1W MA50 (red trend-line) and the Resistance level,” he said. “That was the first sign of the upcoming Parabolic Rally, which was confirmed after the price broke above the Resistance.”
TradingShot highlighted that “BTC formed a Channel Up itself, and right now, we are on the November Bullish Leg and its consolidation phase (circle) that has been evident on both fractals. The 2020 - 2021 rally lasted for 164 days after November 01 and rose by +395%.”
“Even if these time and price lengths aren't replicated, the key here for traders and investors alike is this: From October 09, 2020, up until April 18, 2021, BTC never closed a 1D candle below its 1D MA50 (blue trend-line),” he underscored. “It was the 1D MA50 that fully supported this 6-month rally, giving excellent buy entries for those seeking dip buying opportunities or those who simply wanted to hold onto their BTCs for as high as possible.”
“As a result, a viable and confirmed strategy at this stage of the Cycle (if you don't want to trade the volatility and buy low/sell high) could be just to sell when a 1D candle finally closes below the 1D MA50. This is what we effectively call 'riding the 1D MA50 wave,’” he concluded.
Position trader Bob Loukas highlighted what most crypto analysts are saying, that this current pause is just temporary as Bitcoin gears up for the next leg higher.
Clearly (as clear as trading can be) a pause before the next leg up $BTC pic.twitter.com/l9Zn2CHMra
— Bob Loukas ? (@BobLoukas) November 15, 2024
But John Glover, Chief Investment Officer of Ledn, warned that Bitcoin’s steep rise since Trump’s election suggests a deeper correction is needed before BTC can meaningfully make a run at $100,000.
“What a week! BTC wildly exceeded my $85k price target and traded all the way up to touch the rising trend line resistance (white line) at $94k,” he said in a note shared with Kitco Crypto. “This is a very strong resistance line, and I believe it will take a number of attempts before we break this.”
“With Wave III now complete (orange line), I now expect a Wave IV correction to ensue over the coming months,” Glover said. “We may see a couple more attempts to trade to $100k first, but this correction is coming.”
“The question is: ‘How deep?’” he added. “The most common 4th wave correction is 23.6%, which would take us to ~$77k, with 38.2% being the next most common, which would see us trade to ~$68k. Don’t get me wrong, we are still in a bull trend which will take us up towards $116k to $125k to complete this bull run in 2025.”
Reinforcing Glover’s last point, market analyst Rekt Capital highlighted that Bitcoin is only on day 10 of its parabolic cycle, which has historically lasted an average of 300 days.
#BTC has only just begun its Parabolic Phase in the cycle
Historically, this phase has lasted on average ~300 days
Bitcoin is only on Day 10 of its Parabolic Phase$BTC #Crypto #Bitcoin— Rekt Capital (@rektcapital) November 15, 2024
Altcoins bounce back after sell-off
Altcoins saw some love from traders on Friday after a two-day pullback, with the majority of tokens in the top 200 recording gains to end the work week.
Daily cryptocurrency market performance. Source: Coin360
The top performers include Flare (FLR), Algorand (ALGO), and Cardano (ADA), with gains of 41.1%, 23.7%, and 19.7%, respectively. Kaspa (KAS) was the biggest loser, falling 10.4%, followed by losses of 7.6% for Baby Doge Coin (BabyDoge) and SATS (1000SATS).
The overall cryptocurrency market cap now stands at $2.98 trillion, and Bitcoin’s dominance rate is 60.1%.
