After several days of price increases that saw many cryptocurrencies hit two-year highs, a correction began in the broader crypto market on Friday as traders looked for profit-taking following the hype surrounding the launch of the first spot Bitcoin (BTC) ETFs have started to decline.
In the afternoon, shares came under pressure and gave up the gains made at the opening of the stock exchange as the latest earnings reports from major banks failed to impress investors. However, the downside was minimized after the latest Producer Price Index report showed an unexpected fall in prices last month, boosting hopes that inflation will fall further, clearing the way for the Federal Reserve to cut interest rates.
At the closing bell, the S&P closed up 0.08%, the Dow lost 0.31% and the Nasdaq was flat.
Data provided by TradingView shows that Bitcoin overwhelmed bullish support at $46,000 around midday and then pushed the top crypto to a low of $43,135. They're now trying to keep the pressure on as the market heads into the weekend, but the bulls aren't backing down to gain more ground without a fight.
BTC/USD Chart from TradingView
According to Jim Wyckoff, senior technical analyst at Kitco, the loss of momentum was seen early on in the futures market. He said: “Bitcoin futures prices in January.” [were] slightly weaker in early US trading on Friday after hitting another contract high on Thursday.”
Bitcoin futures 1-day chart. Source: Kitco
“Bulls still have a solid overall technical advantage in the short term as price uptrend is observed on the daily bar chart,” Wyckoff said. “The uptrend is the bulls’ friend and suggests more upside potential in the short term.”
“Bitcoin ETF causes Bitcoin price to fall from $48,000” tweeted MN Trading founder Michaël van de Poppe. “Is that bad? No. It's short-term selling pressure from parties moving from spot Bitcoin to an ETF. Long-term, that's absolutely massive and will push Bitcoin over $200,000. Buy the dip.”
In a separate post, Poppe explained the range in which he believes BTC will trade for the foreseeable future and said he believes altcoins could continue to post gains as Bitcoin consolidates.
#Bitcoin corrects lower after ETF approval and range appears to be defined.
In the meantime, as Bitcoin consolidates, I expect altcoins and Ethereum to significantly outperform. pic.twitter.com/vuBGE6pwAy
– Michaël van de Poppe (@CryptoMichNL) January 12, 2024
Altcoin Sherpa noted that $36,000 is a good entry level for those looking to buy Bitcoin once the correction is close to completion.
$BTC: If this was indeed the local peak (I'd say the 1W looks pretty ugly), 36k would probably be the region you want to check. There is a lot of confluence there with some key Fib levels, 200D EMA, etc. We'll see how far down it goes. #Bitcoin pic.twitter.com/ye8xWG1FBm
— Altcoin Sherpa (@AltcoinSherpa) January 12, 2024
And market analyst Rekt Capital said that based on Bitcoin's price movement that led to previous halvings, a major correction will occur within the next 30 days.
#BTC
Historically, Bitcoin tends to execute its pre-halving rally around 60 days before the halving (light blue).
What means…
If $BTC is going to make a deeper pullback during its pre-halving period (orange), it should happen in the next 30 days or so#BitcoinETF #Bitcoin pic.twitter.com/9mDseEB0uO
– Rekt Capital (@rektcapital) January 12, 2024
Altcoins in the red
Approximately 80 percent of tokens in the top 200 posted losses on Friday as the correction was wide and deep, resulting in a 4.72 percent decline in the total cryptocurrency market capitalization from the previous day – a drop of $80 billion.
Daily cryptocurrency market performance. Source: Coin360
FTX Token (FTT) was the biggest gainer with a gain of 18.4%, followed by a gain of 14.6% for Helium (HNT) and a gain of 6.6% for Worldcoin (WLD). Solana-based meme token Bonk (BONK) was the biggest loser, down 15.15%, while THORChain (RUNE) fell 9.87% and Sei (SEI) fell 9.26%.
The total cryptocurrency market cap is currently $1.7 trillion, and Bitcoin’s dominance rate is 50.2%.
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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