Bitcoin falls to $19,200 as global financial markets tumble

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(Kitco News) – The downtrend in the cryptocurrency market that began on Friday extended into trading on Monday as investors await a collection of inflation reports due later in the week that could provide insight into what’s next from the Federal Reserve.

JPMorgan CEO Jamie Dimon’s comments that the US economy is likely to enter a recession in the next six to nine months did little to boost investor confidence. The CEO pointed to ongoing inflation, large interest rate increases and the unknown effects of the Federal Reserve’s quantitative easing policy as indicators of a possible recession.

Data provided by TradingView shows that Bitcoin (BTC) came under pressure in early trading on Monday, with bears giving the top crypto little room to breathe amid an onslaught of selling that dropped it to a daily low of $19,121 in the afternoon session before bulls bid back over $19,200.

BTC/USD 4-hour chart. Source: TradingView

The ongoing battle for control was touched upon by Kitco senior technical analyst Jim Wyckoff, who noted in his morning update that “Bulls and bears continue to battle for near-term technical control amid quieter and sideways trading, with neither gaining much ground and still at a evenly superior technical playing field in the short term.”

The lack of dominance by bulls or bears combined with several headwinds and investor uncertainty “suggests more sideways and choppy trading in the near term,” Wyckoff suggested.

For crypto investors looking for more exciting price action, Michaël van de Poppe, founder and CEO of trading firm Eight, proposed they may have to wait another 48 hours or so since the markets will most likely “remain unchanged until we get all the economic data on Wednesday and Thursday.”

After that, things could get more interesting due to the fact that the Bitcoin Historical Volatility Index is now below 25. Previous instances when this happened were followed by an increase in volatility.

A very big move is on the horizon too #Bitcoinas $BVOL drops sub 25.

Historically, that’s a guaranteed recipe for massive volatility.

1; crashed to $3K in 2018.
2; break over $4K to $14K in 2019.
3; break above $10K in 2020 (kickstart bull 2021).

C/ @krugermacro pic.twitter.com/QvKXT9Ql28

— Michaël van de Poppe (@CryptoMichNL) 10 October 2022

As for which way the price could go if volatility were to rise, the dominant consensus on crypto-Twitter is that it will be to the downside, with the majority of analysts giving a target between $17,000 and $18,800.

“I think we’re stuck in the middle of the bear market with a final capitulation coming,” Crypto Capital Venture founder Dan Gambardello so. “This means we are approaching the maximum opportunity in crypto. Be ready!”

Markets fall as global headwinds increase

Losses were widespread in trading across global financial markets on Monday as the CBOE Volatility Index (^VIX), which measures short-term expectations of market turbulence, rose above 32 as US Treasury yields continued to climb higher.

At the end of US markets, the S&P, Dow and Nasdaq all finished in the red, down 0.75%, 0.32% and 1.04% respectively.

It was a similar story in the altcoin market, with the vast majority of tokens in the top 200 going negative on the day.

Daily performance in the cryptocurrency market. Source: Coin360

Notable exceptions to the widespread decline include a 27% gain for Huobi Token (HT), a 16.85% increase for Maker (MKR) and a 9% gain for Just (JST).

The total cryptocurrency market cap is now $934 billion, and Bitcoin’s dominance rate is 39.5%.