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(Kitco News) – The downtrend in the cryptocurrency market that began Friday extended into Monday’s trading as investors await a suite of inflation reports due later in the week that could provide a glimpse of what what’s next from the Federal Reserve.
Comments by JPMorgan CEO Jamie Dimon that the US economy is likely to enter a recession in the next six to nine months did little to boost investor confidence. The CEO pointed to runaway inflation, big rate hikes and the unknown impact of the Federal Reserve’s quantitative tightening policy as indicators of a possible recession.
Data provided by TradingView shows that Bitcoin (BTC) came under pressure in the early hours of trading Monday, with bears giving the top crypto little breathing room amid a rush of selling that hit daily lows of 19,121 during the earlier afternoon session $ dropped bulls bid it back above $19,200.
BTC/USD 4 hour chart. Source: TradingView
The ongoing battle for control was addressed by Kitco Senior Technical Analyst Jim Wyckoff, who noted in his morning update that “bulls and bears continue to battle for near-term technical control amid calmer and sideways trading, with neither gaining a lot of ground and a balanced short-term overall technical environment is still going strong.”
The lack of dominance by bulls or bears coupled with multiple headwinds and investor uncertainty “points to more sideways and choppy trading in the short-term,” Wyckoff suggested.
Michaël van de Poppe, founder and CEO of trading firm Eight, suggested that crypto investors looking for more exciting price action might need to wait another 48 hours as markets will most likely be “flat until we get the full economic data on.” Wednesday and Thursday.”
Things might get more interesting after that as the Bitcoin Historical Volatility Index is now below 25. Previous instances of this occurring have been followed by increases in volatility.
A very big move is on the horizon for #Bitcoin as $BVOL dips below 25.
Historically, that’s a guaranteed recipe for massive volatility.
1; Crashed to $3,000 in 2018.
2; Breaking above $4,000 to $14,000 in 2019.
3; Breaking above $10,000 in 2020 (kickstart bull 2021).
C/ @krugermacro pic.twitter.com/QvKXT9Ql28
— Michaël van de Poppe (@CryptoMichNL) October 10, 2022
As for the direction that the price might go should volatility increase, the prevailing view on crypto twitter is to the downside, with the majority of analysts setting a target between $17,000 and $18,800.
“I think we’re wedged in the middle of the bear market, with one last capitulation along the way,” said Dan Gambardello, founder of Crypto Capital Venture. “This means we are approaching maximum opportunity in crypto. Be ready!”
Markets fall as global headwinds mount
Losses were widespread in global financial markets trading on Monday as the CBOE Volatility Index (^VIX), which measures near-term expectations for market turmoil, rose above 32, while US Treasury yields continued to rise.
At the close in the US, the S&P, Dow and Nasdaq all ended lower, down 0.75%, 0.32% and 1.04%, respectively.
It was similar in the altcoin market, where the vast majority of tokens in the top 200 traded negatively on the day.
Daily performance of the cryptocurrency market. Source: Coin360
Notable exceptions to the broader downturn include a 27% surge for Huobi Token (HT), a 16.85% surge for Maker (MKR), and a 9% surge for Just (JST).
The total cryptocurrency market cap is now $934 billion and Bitcoin’s dominance rate is 39.5%.
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