Bitcoin struggles to hold above $21,500 as SEC announces more enforcement actions

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(Kitco News) The weakness present in the cryptocurrency market on Friday carried through the weekend and led to further losses in trading on Monday, as several recent enforcement actions by the Securities and Exchange Commission have led to a serious case of FUD (fear, uncertainty and doubt) among the crypto community.

Stocks, meanwhile, climbed higher to start the week as investors are cautiously optimistic ahead of tomorrow’s consumer price index (CPI), which is expected to show the annual inflation rate has fallen to 6.2% from 6.5% the previous month. At the close of US markets, the S&P, Dow and Nasdaq ended the day in the green, up 1.14%, 1.11% and 1.48% respectively.

Data provided by TradingView shows that Bitcoin’s (BTC) price started to trend down late Sunday and continued to trade lower throughout the morning, hitting a daily low of $21,373 just after noon before being bid back above $21,600 later in the afternoon.

BTC/USD 4-hour chart. Source: TradingView

The weakness seen in the early hours of Monday resulted in a three-week low in the price of Bitcoin futures, according to Kitco senior technical analyst Jim Wyckoff, who said that “the price rally on the daily bar chart has been negated and the bulls have lost their technical advantage in short term.”

As it stands, “Bears are working on a price downtrend,” Wyckoff concluded.

Bitcoin must contain $21,500

While no one likes the sight of falling prices, analysts at Eight Global said that “A correction was due,” highlighting that this coincidentally “coincided with another regulatory crackdown on the crypto space last week.”

Digging deeper into the data, the Bitcoin chart shows that “after two failed attempts to establish support at $23,500 and the daily 8EMA [exponential moving average]support fell and price moved back to the $20,800 – $21,700 region,” Eight Global said. The top of the current range is found at the 0.382 fib retracement level and is in sync with the daily 34EMA, “which so far has support.”

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

“As long as the daily candle remains above $21,500 (which is an area of ​​great interest to futures and margin traders), longs may be favored,” the analysts said. “We may see a few weeks of picking up liquidity in the south, but as long as $21,500 doesn’t turn into resistance, at least a bearish retest of the $22,500 area is likely, which would provide a chance to secure any longs taken at current levels with a stop-loss order at break-even.”

The likelihood of BTC being able to hold above $21,500 remains in doubt, as crypto market analyst Rekt Captial highlighted in the following tweet, suggesting that BTC is positioned for a downside continuation.

New #BTC Weekly close occurs below the green level which technically positions the price for downside continuation

Especially if the green one $BTC level acts as resistance throughout the week#Crypto #Bitcoin pic.twitter.com/LnbLQvqMnv

— Rekt Capital (@rektcapital) 13 February 2023

Crypto market cap falls back below $1 trillion

The vast majority of the altcoin market was in the red on Monday, with only a handful of tokens making small gains, while many projects suffered double-digit declines and the total cryptocurrency market capitalization fell back below $1 trillion.

Daily performance in the cryptocurrency market. Source: Coin360

The biggest gainer of the day was BinaryX (BNX), which climbed 11.55% to trade at $169.70, followed by a 10% gain for Maker (MKR) and a 9.1% gain for Curve DAO Token (CRV).

The total cryptocurrency market cap is now $997 billion, and Bitcoin’s dominance rate is 41.8%.