Bitcoin fails to rally above $25k, resulting in a pullback to $24,300 support

Editor’s Note: With so much market volatility, stay tuned for daily news! Get caught up in minutes with our quick summary of today’s must-read news and expert opinions. Sign up here!

(Kitco News) – Financial markets came under pressure on Tuesday, as the first day after the US long weekend saw asset prices plunge on the prospect of higher interest rates, amid signs that inflation remains “sticky”.

Traditional markets were particularly hard hit as data provided by Walmart showed that consumers have started to reduce their spending in the face of persistent inflation, which has the potential to lead to a negative impact on profit margins. At the closing bell, the Dow, S&P and Nasdaq all finished in the red, down 2.0%, 2.06% and 2.5% respectively.

Data provided by TradingView shows that an early morning attempt by Bitcoin (BTC) bulls to push the price past the $25,000 resistance was solidly rebuffed by bears, sending the top crypto plunging 4.1% to a daily low of $24,225 on the afternoon.

BTC/USD 4-hour chart. Source: TradingView

Before the afternoon pullback, March futures prices on a new contract “hit a high Tuesday,” according to Kitco senior technical analyst Jim Wyckoff, who noted that “Bulls have regained the solid overall technical advantage in the near term to suggest more upside, as an uptrend trend on the daily chart has been restarted.”

Major resistance at $25k

According to the latest market update from Eight Global, the key area of ​​support for Bitcoin found the $20,800-$21,700 region serving its purpose in last week’s trade, resulting in “another leg up towards the $25,200-$25,500 resistance,” which is also 0.618 fib retracement level.

BTC/USD 1-Day Chart. Source: Eight Global

“In that process, we also got a confirmation of $23,500 (0.5 fibs) support and the price is currently trading with 8EMA support again,” the analysts said.

For those looking for the opportune time to re-enter the market, Eight Global noted that “Aggressive long entries could be sought during the retest of the 8EMA and the 0.5 fib retracement level,” but suggested that a “more moderate venue for entries is $22,400 – $22,600 area that has not been tested for support after the last break above.”

For now, the main resistance to overcome is the $25,200 – $25,500 range, which bulls failed to reach earlier on Tuesday, followed by the next major resistance zone at $28,000.

The significance of the $25,000 resistance level was expanded upon in the latest “Ahead of the Curve” newsletter from Arcane Research, which noted that Bitcoin “is trading at its highs from the trading range that emerged after the 3AC collapse last summer.”

According to Arcane Research, “This area served as support during the LUNA collapse in May and served as resistance in early August. Technically, there are few resistance levels between $25,000 and $28,000, and a strong breakout could cause a strong market reaction.”

The research firm also pointed out that last week’s rally did not reflect the performance of broad financial markets. “We saw similar signs of independent crypto strength during the weekend rallies in January. This is a positive trend, as it could revive external demand for BTC as a portfolio diversifier.”

A pullback in the altcoin market

The altcoin market was hit hard by the pullback in BTC as traders saw it as a sign that the market could struggle in the short term and took the opportunity to exit the market while there were still gains left to claim.

Daily performance in the cryptocurrency market. Source: Coin360

Notable exceptions to the downturn include Ankr (ANKR), which rose 35.24% the day after the project revealed a new partnership with Microsoft to offer cloud hosting, while UMA (UMA) rose 16.17% and Conflux (CFX) rose 15 .47%.

The total cryptocurrency market cap is now $1.11 trillion, and Bitcoin’s dominance rate is 42.5%.