(Kitco News) – The cryptocurrency market saw a pullback in price during trading on Wednesday as several major announcements – including the possibility that Genesis Global Capital could be forced to file for Chapter 11 bankruptcy protection – put End to the multi-day streak of price gains as traders saved profits and are now waiting for a good opportunity to re-enter the market.
Traditional markets were also under pressure as the latest retail sales report showed a slowdown in consumer spending to accompany a colder-than-expected inflation reading. As markets closed in the US, the S&P, Dow and Nasdaq all ended in the red, down 1.56%, 1.81% and 1.24%, respectively.
Data from TradingView shows an early morning push higher by Bitcoin (BTC) bulls was firmly rejected at $21,646, leading to a rapid 5.72% decline to a daily low of 20,415. $ before being pushed back above the support at $20,800.
BTC/USD 4 hour chart. Source: Trading View
The price pullback was a “normal break from hitting a four-month high on Tuesday” according to Kitco senior technical analyst Jim Wyckoff, who noted that the bulls “still have the overall short-term technical advantage of the market.” ‘company in the midst of an upward price trend up the daily bar chart.
“That suggests even more near-term potential,” Wyckoff concluded.
Corrective pullback before a bull market
A recent market update report from Eight Global called the possibility of a corrective pullback a likely scenario based on where the price and RSI were trading. According to analysts at Eight Global, $20,000 and $19,500 are the levels to watch now as good places to look for long opportunities.
“In particular, the $19,500 area is interesting, both from a horizontal S/R level perspective and the 200-day simple moving average also starts to curl from there,” the update reads. .
“If a decline occurs, the price may reach $18,800, so initial stop loss (SL) orders could be placed below. When the price reaches the $20,800 area again, SL can be moved towards breakeven or profit to secure the position,” the analysts noted.
Full-time crypto trader Daan Crypto Trades noticed that the current price action for Bitcoin is similar to what was seen in April 2019 and warned that those expecting a quick follow-up rally might be disappointed as price “may crash here for much longer than you think.”
BTC/USDT 1-day chart. Source: Trading View
“In 2019, we worked in a small range for a month before seeing a breakout. Many positions, on both sides, were rektted during this chop,” Daan warned.
Market analyst Rekt Capital made a similar observation about the move in April 2019 and posted a tweet hinting at the possibility of a pullback to $17,000.
If this current #BTC the rally indeed resembles the breakout of April 2019…
—Rekt Capital (@rektcapital) January 18, 2023
Altcoin market takes a hit
The broader altcoin market also returned some of the gains it recently captured, as only a handful of tokens were in the green while the vast majority posted losses on the day.
Daily performance of the cryptocurrency market. Source: Coin360
Projects that managed to post gains amid the general market pullback include Kava (KAVA), which rose 9.82% to $1.03, an 8.88% gain for Galxe (GAL) and a 6.98% increase for Shiba Inu (SHIB).
The overall cryptocurrency market capitalization now stands at $975 billion and Bitcoin’s dominance rate is 41.3%.
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