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(Kitco News) – The rotation into altcoins continued Wednesday as Bitcoin (BTC) remained pinned below $36,000. A 12.4% decline in the 24-hour trading volume suggests that trading activity is starting to quiet down following Tuesday’s short squeeze that pushed BTC to a fresh 2023 high.
Stocks showed weakness amid a slow economic news week, as multiple firms missed on their earnings expectations, prompting some investors to sell amid the growing headwinds facing global financial markets.
At the closing bell, the S&P and Nasdaq managed to finish higher, up 0.10% and 0.08%, respectively, while the Dow closed down 0.12%.
Data provided by TradingView shows that after Bitcoin’s price drifted lower during the morning session, bulls staged an afternoon rally with their sights set on resistance at $36,000, but were stopped short by a bear defensive line at $35,785, prompting a pullback to support at $35,500.
BTC/USD Chart by TradingView
Kitco senior technical analyst Jim Wyckoff observed that “November Bitcoin futures prices [were] a bit weaker in early U.S. trading Wednesday,” saying that while “Prices have paused at higher levels,” it’s not necessarily a bearish development.
Bitcoin futures 1-day chart. Source: Kitco
“The BTC bulls still have the firm overall near-term technical advantage as a price uptrend on the daily bar chart is still in place,” Wyckoff said.
And it’s not just on the price chart where the bull v. bear battle is playing out, as MN Trading analyst Daan Foppen noted in the latest issue of the Trade Letter, “We are seeing a lot of fighting between bulls and bears on social media,” with bulls trying to convince the market that “we are in a bull market already.”
“When you look at the monthly chart, we can actually see that 2023, as a whole, is a complete uptrend, which is a good argument for bulls,” Foppen said.
BTC/USD 1-month chart. Source: MN Trading
“However, you could also argue that we have traded back into premium levels on the monthly timeframe when you take a look at this fractal dealing range,” he said.
BTC/USD 1-month chart. Source: MN Trading
“The [fair value gap] that we are currently trading in could be the resistance area that Bitcoin is not able to overcome for a while,” he warned.
“To be honest, I am not really participating in the whole argument if we are in a bull or bear market,” Foppen said. “As a trader, I do not really care. I try to detach myself from the complete market sentiment and [just focus on] my own thesis.”
He said he is not interested in shorting against the recent strength “unless [he has] the confirmation, but for now, that is not the case as of yet.”
“Something that is noticeable is the gain back into the old range of 2021/2022 (partly),” he said. “The $31K level acted as major support and resistance, but we have seen a strong candle close above that level, which was crucial to see higher prices. It would be great if we could get an S/R flip” where this level starts to serve as a good support level.
BTC/USD 1-month chart. Source: MN Trading
Foppen noted that BTC is currently trading above the range high, and warned that we could “see another deviation for a small retracement back into the range,” but said he is uncomfortable opening a short to try and catch that potential move.
BTC/USD 4-hour chart. Source: MN Trading
“I would rather see a sweep of the relative equal highs first,” he said. “If we drop back into the range afterward, that could provide a short opportunity.”
Foppen concluded by recommending that traders “detach [themselves] from the market and simply trade the trend as long as it is your friend,” noting that the crypto market has come a long way since this time last year when the FTX debacle was just starting to have a material effect on prices across the market. “Be a little bit happy where we are in the market as a whole, we came from a very low point,” he said.
Token rotation sees select altcoins breakout
The vast majority of tokens in the top 200 recorded gains on Wednesday, with only nine tokens seeing losses greater than 3%.
Daily cryptocurrency market performance. Source: Coin360
Storj (STORJ) was the breakout start of the day with a 52.1% increase to trade at $0.695, while Steem (STEEM) gained 21.54%, and Illuvium (ILV) climbed 20.1%. Trust Wallet Token (TWT) suffered the biggest decline, falling 17.5% after Binance, which owns the wallet project, announced the launch of its proprietary digital wallet. Tuesday’s biggest gainer, Ordinals (ORDI), saw its price decline 9.1%, and Alchemy Pay (ACH) lost 5.5%.
The overall cryptocurrency market cap now stands at $1.35 trillion, and Bitcoin’s dominance rate is 51.7%.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
