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Crypto prices dip, but analysts remain bullish as long as BTC holds above $35k

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(Kitco News) – Cryptocurrency prices corrected lower on Tuesday after the U.S. Department of Justice (DoJ) announced that Binance CEO Changpeng Zhao (CZ) has agreed to a plea deal regarding charges filed against him and the exchange that will see CZ step down as CEO and the exchange pay a fine of $4.3 billion.

More broadly, financial markets fell under pressure after the minutes from the Federal Reserve’s Oct. 31 – Nov. 1 meeting showed that Fed officials agree that the central bank can “proceed carefully” when it comes to future interest rate decisions.

All FOMC participants “judged that it would be appropriate for policy to remain at a restrictive stance for some time until inflation is clearly moving down sustainably toward the Committee’s objective,” the minutes said. The Fed members decided on this path forward largely because inflation remains stubbornly above their 2% target, and they feel more action will be needed to reach this mark.

At the close of markets, the S&P, Dow, and Nasdaq all finished in the red, down 0.24%, 0.22%, and 0.65%, respectively.

Data provided by TradingView shows that Bitcoin (BTC) started trending lower early on Tuesday, with bears intensifying their pressure near midday, which resulted in BTC hitting a low of $36,270. Bulls have since mounted a comeback and Bitcoin trades near support at $37,000 at the time of writing.

BTC/USD Chart by TradingView

“November Bitcoin futures prices [were] a bit weaker in early U.S. trading Tuesday,” according to Kitco senior technical analyst Jim Wyckoff.

Bitcoin futures 1-day chart. Source: Kitco

“A price uptrend is still in place on the daily bar chart but the bulls need to show more power soon to keep it alive,” Wyckoff said. “The recent higher volatility at higher price levels is not bullish. The BTC bulls do still have the slight overall near-term technical advantage.”

According to market analyst Bloodgood, “Bitcoin remains stuck under monthly resistance 10 days before the monthly close.”

“The weekly timeframe shows no change from last week as it’s still above the level, even managing to successfully retest it,” he said. “The only thing keeping Bitcoin from teleporting through $40k is the monthly level.”

BTC/USDT 1-week chart. Source: Substack

“Looking at the overall picture, things look pretty clear: $38k is resistance, hence closing above is bullish, and $32k is support, hence closing below is bearish,” he said.

“Everything in between these levels is normal and dropping back to $32k would be nothing but a healthy retrace (if the level doesn’t break of course),” Bloodgood said. “As Bitcoin is stuck below the monthly resistance and some alts are pumping, these two things in combination can be a bad sign, so don’t be caught off guard if the retrace happens sooner rather than later. Of course, this warning is invalidated if we break the $38k level.”

Zooming in on the daily chart, he said, “The daily range continues as the bounce from the $34k area didn’t break the local top and retraced in one candle.”

BTC/USDT 1-day chart. Source: Substack

“As long as BTC continues to range in this area we can expect alts to keep offering some interesting opportunities,” he concluded.

According to Markus Thielen, head of research at Matrixport, as long as Bitcoin holds above $35,000, there’s a chance it could hit $45,000 before the end of 2023.

BTC/USD 1-day chart. Source: Matrixport

“Bitcoin has successfully tested the $35,000/$35,500 level, which we determine as the key technical level into year-end,” he said. “As long as Bitcoin stays above this level, we want to be long – even leveraged long through higher beta crypto exposure. This can include Bitcoin miners or simply Ethereum or other altcoins. Our base case is still $40,000 to $45,000 by Christmas.”

Altcoins take a beating

It was a red day for the altcoin market as all but a handful of tokens in the top 200 recorded losses.

Daily cryptocurrency market performance. Source: Coin360

Blur (BLUR) overcame the downward pressure to post a gain of 11.4%, while FTX Token (FTT) climbed 10.2%, and tomiNet (TOMI) increased by 6.5%. aelf (ELF) experienced the largest drawdown with a loss of 17.3%, followed by a decline of 17.1% for Siacoin (SC), and a decrease of 13% for Arweave (AR).

The overall cryptocurrency market cap now stands at $1.4 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.

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