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(Kitco News) – Financial markets came under pressure on Wednesday after the latest wholesale inflation data came in higher than expected, raising the prospect of further rate hikes by the Federal Reserve, which continues to struggle to keep inflation moving towards its 2% target reduce .
The likelihood of such a hike increased in investors’ minds after the Federal Open Market Committee’s September meeting minutes were released. It shows that a majority of Fed members in attendance agreed that another rate hike would “probably be appropriate.”
After briefly slipping into the red around midday, stocks were able to overcome the noise and turn higher, resulting in a positive close for the S&P, Dow and Nasdaq, up 0.42%, 0.19% and 0.71, respectively % increased.
Data provided by TradingView shows that Bitcoin (BTC) was under selling pressure throughout the day, falling below support at $27,400 in the early hours and falling to a two-week low of $26,525 in the afternoon before bulls took it back pushed above the support at $26,700.
BTC/USD chart from TradingView
The early morning pullback led to “October Bitcoin futures prices.” [trading] weaker in early U.S. trading on Wednesday,” said Jim Wyckoff, senior technical analyst at Kitco.
Bitcoin futures 1-day chart. Source: Kitco
“The bears gained some momentum midweek as prices broke down through an uptrend line drawn on the daily bar chart,” Wyckoff said. “The bulls need to get stronger soon and show new vigor to restart the price uptrend.”
According to Daan Foppen, analyst at MN Trading, the monthly chart for Bitcoin shows that the top cryptocurrency is currently trading “right in the middle of two points of interest.”
BTC/USD 1-month chart. Source: MN Trading
“Above us, we have the optimal target for bulls, which is the monthly fair value gap, which starts at around $32,000,” Foppen said. “But on the other hand, we have a series of consistent lows, which could also be a clear withdrawal of liquidity. So what would be the logical goal? I tend to say the latter.”
He said he believes Bitcoin is more likely to fall than rise because “the price will very likely move from internal liquidity to external liquidity and vice versa.”
BTC/USD 1-month chart. Source: MN Trading
“We are currently rejecting internal liquidity in the form of the monthly FVG [fair value gap]Therefore, it makes the most sense to me to trade towards the same lows in the coming period,” he said. “This would be invalid if we had a convincing closing price above the middle threshold of the monthly FVG. That would be our first indication that the price is likely to rise.”
Foppen said that if such a trend emerges on the monthly time frame, “we should look at the daily time frame to see how the price might move in the direction of our trend.”
BTC/USD 1-day chart. Source: MN Trading
“We see that we are currently on the verge of losing a daily FVG,” he said. “This means that today’s close will be crucial. If we move below the current FVG, it becomes more and more likely that we will trade towards the lows.”
Foppen noted that the last two months have been characterized by sideways price action and said that “from a value perspective, we can see that we have traded above the high of the value range.”
BTC/USD 4-hour chart. Source: MN Trading
“However, we can see the price currently falling back into value territory,” he said. “If the price re-enters the range, there will likely be a rotation towards the other side, which is a nice match with our bias.”
Altcoins appear in the red
The vast majority of altcoins in the top 200 posted losses on Wednesday as crypto traders moved to de-risk amid a falling BTC price.
Daily cryptocurrency market performance. Source: Coin360
Request (REQ) was the only notable gainer, up 32.5%. Storj (STORJ) led the losers with an 8.63% decline, followed by a 7.16% loss for Centrifuge (CFG) and a 5.9% decline for Stratis (STRAX).
The total cryptocurrency market cap is currently $1.05 trillion, and Bitcoin’s dominance rate is 49.8%.
Disclaimer: The views expressed in this article are those of the author and may not reflect those 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 this accuracy. This article is for informational purposes only. It is not a request to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no liability for any loss and/or damage arising from the use of this publication.
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