Bitcoin's Battle Below $62K Signals Crypto Market Jitters

Wednesday saw another day of volatile consolidation for the crypto market as Bitcoin (BTC) fell under pressure early in the trading session and saw intense grappling between bulls and bears near support at $62,000 in the afternoon. 

Stocks also trended lower at the market open and struggled to climb back into the green, with the day ending mixed for the major indices. The struggles come as investors remain unsure about the future of interest rates as they evaluate the latest earnings reports to see if other sectors can perform as well as tech.   

At the closing bell, the Dow finished up 0.44%, the S&P was flat, and the Nasdaq lost 0.18%. The DXY was flat on the day, and the U.S. 10-year Treasury yield increased 81 basis points to 4.494%. 

Data provided by TradingView shows that Bitcoin spent the day oscillating in a range between $61,530 and $63,020, with a stalemate in the battle for control of support at $62,000. 

BTC/USD Chart by TradingView

At the time of writing, Bitcoin trades at $61,500, a decrease of 2.36% on the 24-hour chart.

Potential drop to $60,000 

“Bitcoin has been retreating from its 50-day moving average since the start of the week,” said analysts at Secure Digital Markets. “The price is eyeing a potential drop to the $60,000 level, especially if Bitcoin ETFs continue to see substantial outflows. Should this outflow persist, it could lead to a break below $60,000, possibly revisiting the recent lows at $56,500.” 

Data provided by Farside shows that Tuesday saw a net outflow of $15.7 million, attributable to Grayscale’s GBTC, which recorded $28.6 million in outflows after two days of positive inflows. BlackRock recorded zero inflows. 

“However, market sentiment currently holds a cautious optimism for maintaining above the $60,000 threshold and aiming for a recovery,” the analysts noted. “Observers are closely monitoring the broader stock market's performance during this earnings season, which could offer insights into the liquidity situation.” 

Aaron Evans, Head of Foundational Operations at the Moonbeam Foundation, also sees rising optimism in the market amid news of increased adoption by institutions and reports from Fidelity that pension funds are exploring allocations into Bitcoin ETFs. 

“Though Bitcoin hasn’t reached a new high like everyone expected after the halving, there’s still some bullish sentiment in the crypto market,” Evans said in a note to Kitco Crypto. “AI tokens are continuing to do well, especially as excitement is building for NVIDIA’s company earnings report.”

Evans suggested this “shows that investors are putting more trust into crypto again as they search for other tokens to invest in. Traders are always looking for new ways to make money and when they see increased institutional interest and other assets doing well, they’re likely to diversify their portfolio. It’s similar to how memecoins operate in the market.”

“As Bitcoin continues to do well or recover, traders are going to look at similar assets that will bring them more earnings,” he concluded. “And we should expect more diversity in digital assets as investors rebuild their trust in the industry.”

But according to market analyst Orson Fawley, Bitcoin “continues to move within a long-standing downward price channel,” and is “anticipated to experience further declines and adjustments if the price channel is not breached by the Bullish side.”

“BTCUSD has recently broken out of the strong support zone at $63,000,” he noted. “In the short term, this continues to favor sellers as signals from EMA and resistance levels support new selling waves, with profit-taking around the $61,000 area as the Bearish side begins to control the trend.” 

On Tuesday, Market analyst Maximillian FX noted that the formation of “a triple top pattern” suggested that further downside is coming, which signaled a good opportunity for a short. 

“BTCUSD is currently undergoing a corrective recovery, finding support at $62,180,” he said. “However, overcoming the $63,000 resistance level remains a challenge and a target. According to statistics, the strongest volatility is after a breakout. A breakout and consolidation below $63,000 could trigger a sharp decline with strong liquidity zones on the chart. There is further evidence that once it hits resistance BTCUSD will reverse as indicated by the 34.89 EMA which is showing signs of turning in favor of the bears maintaining their stance.”

“Technically, from Fibonacci 0.618 a correction could follow,” he warned. “A break of $62,180 would allow for a further profit target, potentially reaching the $60,856 mark (coinciding with a test of the 1.618 Fibonacci number.”

Downtrend in the altcoin market

Altcoins largely traded in the red, with only 20 tokens in the top 200 recording gains on Wednesday. 

Daily cryptocurrency market performance. Source: Coin360

UMA (UMA) surprised traders with a 50.9% surge to trade at $4.03, while FTX Token (FTT) climbed 18.3%, and Tellor (TRB) gained 17.6%. Meme coin dogwifhat (WIF) led the losers, falling by 13.8%, followed by a loss of 13% for Worldcoin (WLD), and a decline of 12% for Livepeer (LPT). 

The overall cryptocurrency market cap now stands at $2.28 trillion, and Bitcoin’s dominance rate is 53.5%.

This article originally appeared on Kitco News