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(Kitco News) – Cryptocurrency prices continued to consolidate on Tuesday as Bitcoin (BTC) bulls looked to gather reinforcements for a run at the stiff level of resistance found above $35,300 that has rejected multiple attempted breakthroughs thus far.
Stocks fended off an early morning bout of selling that initially pushed them into the red, climbing into the green near midday and holding the gains through to the closing bell as investors grow increasingly confident that the Federal Reserve has ended its rate hiking campaign and will keep things steady or lower from here.
At the market close, the S&P, Dow, and Nasdaq finished higher, up 0.28%, 0.17%, and 0.90%, respectively.
Data provided by TradingView shows that Bitcoin spent the first half of the day drifting lower, bottoming out at $34,530 near midday before an afternoon rally pushed it to a daily high of $35,962. Bears rejected the attempt to reach $36,000 and are now locked in a battle for control of the price action near $35,600.
BTC/USD Chart by TradingView
The early bearish pressure resulted in “November Bitcoin futures prices [trading] weaker in early U.S. trading Tuesday,” according to Kitco senior technical analyst Jim Wyckoff.
Bitcoin futures 1-day chart. Source: Kitco
“Prices have paused at higher levels and that’s not bearish,” Wyckoff said. “The BTC bulls still have the firm overall near-term technical advantage as a price uptrend on the daily bar chart is still alive.”
Markus Theilen, head of research at Matrixport, noted that “Bitcoin surged by +28%” in October, which elevated its year-to-date growth by +108%, which surprised market participants and commentators.”
“Based on our historical analysis, the Bitcoin bull market is expected to continue,” Thielen said. “Bitcoin tends to be a solid trending asset because high prices attract more traders to jump on the price move. This, in turn, causes prices to rise even further.”
Historically, “when Bitcoin is up by at least +50% by the end of October, there is, on average, a 78% chance that Bitcoin will advance even more into year-end,” he said. “Bitcoin rallied, on average, another +68% until year-end on seven of nine previous occasions. This analysis is based on thirteen years of Bitcoin history.”
Bitcoin average yearly return. Source: Matrixport
“While by itself, selling $26,000-BTC put options would not yield any significant return, a trader could buy half of the $45,000-BTC-strike call options with those premiums,” Thielen said. “As we head into December, our $45,000 price target from the ‘Matrix on Target’ report seems well within reach.”
Market analyst Maartunn provided validation that the current rally is progressing similarly to previous bull cycles, posting the following chart which shows that, as in previous cycles, Bitcoin is up 120% roughly one year after hitting a bottom.
Like clockwork ⏰
This chart shows the percentage change of bitcoin since the bottom of each cycle. And guess what: For every cycle, Bitcoin ends up approximately +120% about a year after the bottom.
No difference this time. And that’s impressive 😱 pic.twitter.com/cfEMLlTz9G
— Maartunn (@JA_Maartun) November 7, 2023
But Maartunn also sees one indicator that could potentially spell trouble for BTC in the near term. “This chart displays the Aggregated Open Interest of all cryptocurrencies excluding Bitcoin,” he tweeted. “Historically, whenever this metric surpassed $12.2 billion, it resulted in a minimum 20% decline in bitcoin price.”
Aggregated open interest in all cryptocurrencies excluding Bitcoin. Source: Twitter
“Currently, the metric registers at $13.8 billion, indicating a situation that demands significant attention,” Maartunn said.
Addressing the potential for a pullback, MN Trading founder Michaël van de Poppe said that corrections are common in uptrending markets, and highlighted $33,000 – $33,500 as a good range to open a long position.
Corrections do take place in the markets. #Bitcoin is probably going to have a classic liquidity sweep towards $33-33.5K and then back up.
Those dips are entry points for your altcoins.
— Michaël van de Poppe (@CryptoMichNL) November 7, 2023
Mixed performance in the altcoin market
It was a mixed day for the altcoin market with the top 200 tokens split evenly between winners and losers.
Daily cryptocurrency market performance. Source: Coin360
Ordinals (ORDI) recorded the biggest gain with an increase of 85.3%, thanks in large part to being listed on Binance, while Gnosis (GNO) climbed 21.6%, and API3 increased 17%. Memecoin (MEME) experienced the largest pullback, falling 10.21%, while PancakeSwap (CAKE) declined by 8.7%, and Oasis Network (ROSE) fell by 6.5%.
The overall cryptocurrency market cap now stands at $1.34 trillion, and Bitcoin’s dominance rate is 51.8%.
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 accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.