Bitcoin Slips to $23,000 Support as Rising Inflation Starts a Race to the Exits
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(Kitco News) – Crypto prices continued to trend lower for a third day on Friday as the Fed’s most watched inflation measure, the personal consumption expenditures (PCE) price index, came in stronger than expected. This raised concerns that the central bank will have to raise interest rates faster than previously signalled, leading investors to take a risk-off approach.
The threat of rising interest rates also took a toll on stocks, which were under pressure throughout the trading day and never managed to gain a foothold. At the close of US markets, the S&P, Dow and Nasdaq all finished in the red, down 1.07%, 1.06% and 1.69% respectively.
Data provided by TradingView shows that after managing to hold above $23,800 throughout Thursday and into Friday morning, the release of the PCE data was followed by a selloff in Bitcoin (BTC) that saw the top crypto hit a daily low of $22,897 before dip buyers arrived to town the price back above the $23,100 support.
BTC/USD 4-hour chart. Source: TradingView
While some watched the drop with weariness, Kitco senior technical analyst Jim Wyckoff maintained his position that “This week’s sideways price action, or pause, is routine and not bearish.”
According to Wyckoff, bulls still have the overall technical advantage in the short term as a price uptrend is in place on the daily chart.
Crypto trader NekoZ took a similar view that little has changed in the overall outlook, expecting a potential drop to the $21,500 region.
No changes for me on $BTC
The market is showing weakness, and expects a move down to 21500 in the medium term.
I’m not going to short, b/c I think there’s going to be something fucky in between. Simply sitting on the sidelines looking for longs.
Spot inventory has been reduced significantly recently… pic.twitter.com/pxnsTNqiMM
— NekoZ (@NekozTek) 24 February 2023
Meanwhile, cryptoanalyst Mustache has noticed a promising fractal pattern between the current market and 2019 that points to the potential for a significant rally higher in Bitcoin’s future.
#Bitcoin 2019 vs. #Bitcoin 2023🎯
If we continue to follow $BTC 2019 fractal, the following scenario would make sense. Why?
2019:
MA50 and MA200 Cross (D)
LH&HH in the chart, but HH & LH in the Stoch RSI2023:
MA50 and MA200 Cross (D)
LH&HH in the chart, but HH & LH in the Stoch RSI pic.twitter.com/jbfMiy5na6— 𝕄𝕕𝕣𝕚𝕚𝕒𝕒𝕒𝕚𝕖𝕖 🧲 (@el_crypto_prof) 24 February 2023
Altcoins take a beating
Currently, the crypto market is well in correction territory, which means that losses for altcoins are generally greater than for Bitcoin as they tend to have less liquid markets that react more intensely to downturns.
Daily performance in the cryptocurrency market. Source: Coin360
The few exceptions to Friday’s widespread weakness were BinaryX (BNX), Pundi X (PUNDIX) and Optimism (OP), which posted gains of 11.21%, 10.95% and 9.33% respectively.
The total cryptocurrency market cap is now at $1.062 trillion, and Bitcoin’s dominance rate is 42.1%.
Disclaimer: The views expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not an invitation to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept responsibility for any loss and/or damage arising from the use of this publication.
