Focus |Get all the essential market news and expert opinions in one place with our daily newsletter.Receive a comprehensive recap of the day’s top stories directly to your inbox.| ( [Kitco News](/)) – The broader cryptocurrency market consolidated on Wednesday following Tuesday’s Grayscale-inspired rally that brought fresh momentum to an otherwise lackadaisical market and lifted Bitcoin back above $27,000.Stocks spiked at the open, but quickly fell under pressure after revised GDP data was released that showed the US economy grew slower than previously estimated in the last quarter.The market managed to stabilize shortly afterward, allowing prices to creep higher for the remainder of the trading day.At the market close, the S&P, Dow, and Nasdaq all finished in the green, up 0.38%, 0.11%, and 0.54%, respectively.
Data provided by TradingView shows that Bitcoin ( BTC ) traders took profits on Wednesday following the increase in price the day prior, which resulted in the top crypto sliding to support at $27,200.
BTC/USD Chart by TradingView Kitco senior technical analyst Jim Wyckoff said “September Bitcoin futures prices [were] slightly lower in early U.S.
trading Wednesday, after posting solid gains Tuesday and producing a bullish upside breakout from the recent sideways trading range.” Bitcoin futures 1-day chart.Source: Kitco “A price downtrend line remains in place on the daily chart,” Wyckoff added.“The bears still have the slight overall near-term technical advantage but the bulls have momentum on their side.More upside this week would likely negate the downtrend line.” Bitcoin and Treasury Yields In the latest edition of the Trade Letter from MN Trading, CEO Michaël van de Poppe made the case for rising Treasury yields signaling that a turnaround in the crypto market is imminent as the latest data suggests that “a recession is looming.” A sweep of the recent high on the 10-year Treasury was followed by a substantial fall in the value of the yields, Poppe said, which “indicates that people want to start buying government bonds (or the government or banks themselves) and that the yields are turning around.
In that regard, a potential Monthly bearish divergence can be created and the likelihood of a turn-around is happening here.” 10-year Treasury yield.Source: MN Trading A similar move was seen on the 2-year Treasury chart, and Poppe said “The amount of people shorting Treasuries [is] going through the roof, so the likelihood of a reversal is increasing (this means that the Yields are going to fall off a cliff).” A previous example where a similar development occurred was in 2018.“During that period, a bearish divergence was also applied on the markets and, from there on, the markets started to make a U-turn, in which Yields were falling substantially,” he said.“Why is that interesting? Let’s compare the chart with Bitcoin’s price action.” BTC price vs.2-year Treasury note.Source: MN Trading “If we compare the current chart with BTC/USD on a different price scale (the orange line is Bitcoin), some interesting notes can be derived,” he said.
“The previous top in November of 2018 marked the low on Bitcoin.We broke down, but the top of the Yields [coincided with] the bottom of the bear market for Bitcoin.
The continuation of the selloff on the Yields resulted in more and more strength in the Bitcoin markets.” The above chart shows that the first real high in November 2022 also marked a low in Bitcoin, and the price of Bitcoin also started to rally upwards when yields began to sell off in March of 2023.This tells us that “the likelihood of a potential reversal on the Yields is going to be beneficial for the Bitcoin markets,” Poppe said.“Isn’t it a coincidence that Blackrock advocates Bitcoin as the next big asset when the U.S.economy is on the verge of a collapse? The previous time that we had gold being accepted as an ETF, it went into a giant bull market.” “Now, the markets for Bitcoin are comparable to 2015,” he added.
“It’s sustaining above the 200-week EMA.” BTC/USD 1-month chart.Source: MN Trading “The 200-week EMA is a key indicator,” he said.“Holding above that level is an important indicator of continuation here.If Bitcoin sustains above the 200-week EMA, the bottom is in.The crypto markets will most likely surge based on the fact that we’re a safe haven as an asset.” Poppe noted that this outlook depends on whether or not the Fed continues to hike interest rates, and said he sees the potential for one more 25 bps hike, “but that should be it.” Mike McGlone, Senior Macro Analyst at Bloomberg Intelligence, also sees the Fed’s decisions moving forward as being a key catalyst for developments in financial markets.“The inevitable approval of a Bitcoin exchange-traded funds in the U.S.
is moving closer, but the elephant in the room for all risk assets remains – the Fed is still tightening despite the tilt towards economic contraction,” he said.“Breaking downward with volatility bottoming after extreme lows can often signal the start of a next price move.” “The downtrend since the 2021 high may be resuming and $30,000 is a key pivot level.Sustaining back above $30,000 would indicate a reversal upward akin to a similar pattern around $12,000 in 2H20,” he added.“A key factor that’s different this time is unfavorable liquidity – most central banks are still tightening and elevating rollover risks in the stock market.” Weekly BTC price vs.90-day volatility.
Source: Bloomberg “Down almost 10% in 3Q to Aug.29 vs.up about 1% for the S&P 500, Bitcoin may be anticipating a decline in equities typical for a recession,” McGlone warned.Altcoins correct lower The broader altcoin market traded in the red on Wednesday as roughly 90% of the tokens in the top 200 recorded losses.Daily cryptocurrency market performance.
Source: Coin360 CyberConnect (CYBER) was a notable exception to the weakness with a gain of 58% to trade at $8.45, while Merit Circle (MC) increased 16.4%, and Sei (SEI) climbed 13.55%.Akash Network (AKT) was the biggest loser, declining by 11.45% to trade at $1.02, while TomoChain (TOMO) and MAGIC (MAGIC) fell by 6.8%.
The overall cryptocurrency market cap now stands at $1.09 trillion, and Bitcoin’s dominance rate is 48.9%..
