Markets
Bitcoin bears win tug-of-war battle at $62K, analysts warn further declines are likely
(Kitco News) – Wednesday saw another day of volatile consolidation for the crypto market like Bitcoin (Bitcoin) fell under pressure in early trading and saw intense fighting between bulls and bears near support at $62,000 in the afternoon.
Stocks also trended lower at market open and struggled to get back into the green, with the day ending mixed for the main indices. The difficulties come at a time when investors remain uncertain about the future of interest rates as they assess the latest earnings reports to see whether other sectors can perform as well as technology.
At the close, the Dow ended up 0.44%, the S&P was stable and the Nasdaq lost 0.18%. The DXY was flat on the day, and the 10-year US Treasury yield rose 81 basis points to 4.494%.
Data provided by TradingView shows that Bitcoin spent the day hovering in a range between $61,530 and $63,020, with a stalemate in the battle for control of support at $62,000.
BTC/USD Chart by TradingView
At the time of writing, Bitcoin is trading at $61,500, down 2.36% on the 24-hour chart.
Potential drop to $60,000
“Bitcoin has been pulling back from its 50-day moving average since the start of the week,” said analysts at Secure Digital Markets. “The price is targeting a potential drop to the $60,000 level, especially if Bitcoin ETFs continue to see substantial outflows. If this outflow persists, it could lead to a break below $60,000, possibly revisiting the recent lows of $56,500.”
Data provided by Farside shows that on Tuesday there was a net outflow of $15.7 million, attributable to Grayscale’s GBTC, which saw $28.6 million in outflows after two days of positive inflows. BlackRock recorded zero entries.
“However, market sentiment currently maintains cautious optimism to stay above the $60,000 threshold and target a recovery,” the analysts noted. “Observers are closely monitoring the broader stock market performance during this earnings season, which could offer insights into the liquidity situation.”
Aaron Evans, head of fundamental operations at the Moonbeam Foundation, also sees growing optimism in the market amid news of increased adoption by institutions and reports from Fidelity that pension funds are exploring allocations to Bitcoin ETFs.
“Although Bitcoin did not reach a new high as everyone expected after the halving, there is still some bullish sentiment in the crypto market,” Evans said in a note to Kitco Crypto. “AI tokens continue to perform well, especially as enthusiasm for the NVIDIA company’s earnings report builds.”
Evans suggested that this “shows that investors are placing more trust in crypto again as they look for other tokens to invest in.” Traders are always looking for new ways to make money and when they see increasing institutional interest and other assets doing well, they are likely to diversify their portfolio. It’s similar to how memecoins operate in the market.”
“As Bitcoin continues to perform well or recover, traders will look to similar assets that will bring them more profits,” he concluded. “And we should expect more diversity in digital assets as investors rebuild their trust in the industry.”
But according to For market analyst Orson Fawley, Bitcoin “continues to move within a long-standing descending price channel” and “is expected to experience further declines and adjustments if the price channel is not violated by the bullish side”.
“BTCUSD recently broke out of the strong support zone at $63,000,” he noted. “In the short term, this continues to favor bears as EMA signals and resistance levels support further waves of selling with profit taking around the $61,000 area as the bearish side begins to control the trend.”
On Tuesday, market analyst Maximillian FX observed that the formation of “a triple top pattern” suggested that more downside is to come, which signaled a good opportunity for a sell.
“BTCUSD is currently undergoing a corrective recovery, finding support at $62,180,” he said. “However, overcoming the $63,000 resistance level remains a challenge and a goal. According to statistics, the strongest volatility occurs after a breakout. A breakout and consolidation below $63,000 could trigger a sharp decline with strong liquidity zones on the chart. There is more evidence that once resistance is reached, BTCUSD will reverse as indicated by the EMA of 34.89, which is showing signs of turning in favor of the bears, maintaining its position.”
“Technically, a correction could occur from Fibonacci 0.618 onwards”, he warned. “A break of $62,180 would allow for additional profit targeting, potentially reaching the $60,856 mark (coinciding with a test of the 1.618 Fibonacci number.”
Downtrend in the altcoin market
Altcoins were largely trading in the red, with just 20 tokens in the top 200 recording gains on Wednesday.
Daily cryptocurrency market performance. Source: Coin360
UMA (UMA) surprised traders with a 50.9% increase to trade at $4.03, while FTX Token (FTT) rose 18.3% and Tellor (TRB) gained 17.6%. Meme coin dogwifhat (WIF) led the losers, falling 13.8%, followed by a 13% loss for Worldcoin (WLD) and a 12% decline for Livepeer (LPT).
The total cryptocurrency market value is now $2.28 trillion and Bitcoin’s dominance rate is 53.5%.
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