Cryptocurrency Market Correction
Cryptocurrency prices have corrected lower on Thursday as the momentum generated by the U.S. Court of Appeals’ decision in the Grayscale vs. Securities and Exchange Commission (SEC) case has faded. Additionally, the strengthening U.S. dollar has put pressure on asset prices across financial markets.
The selloff in the crypto market accelerated in the afternoon after the SEC announced a delay in its decision on the spot Bitcoin (BTC) exchange-traded fund (ETF) applications by BlackRock, Valkyrie, Invesco, and WisdomTree. The ruling on the applications has now been pushed until at least October.
Stocks Mixed, Bitcoin’s Steep Sell-off
Stocks traded mixed after the Personal Consumption Expenditures (PCE) Index showed that high inflation persists. The bounce-back in the U.S. dollar index (DXY) also acted as a cap on upside moves for assets that managed to increase in price on Thursday.
Bitcoin’s price experienced a steep sell-off in the afternoon, hitting a low of $25,925 before bulls managed to push it back above $26,000. This move lower erased all the gains seen after Tuesday’s Grayscale ruling.
Technical Analysis and Outlook
According to Kitco senior technical analyst Jim Wyckoff, Tuesday’s price action in the Bitcoin futures market produced a bullish upside breakout from the recent sideways trading range. However, a price downtrend line remains in place on the daily chart, giving the bears a slight overall near-term technical advantage. More price gains this week would likely negate the downtrend line.
MN Trading founder Michaël van de Poppe posted his analysis on Twitter, stating that there is a stronger likelihood of the SEC approving a Bitcoin ETF application in October or December. He also mentioned the possibility of an acceptance for the Ethereum ETF Futures in October.
Poppe highlighted the importance of Bitcoin holding above the $26,500-26,800 level. If it holds there, a bullish breakout may occur. However, if Bitcoin clearly loses that level, a further correction towards $24,000-25,000 to test the 200-week EMA may be expected.
Altcoin Market and Overall Cryptocurrency Market Cap
The altcoin market experienced a selloff as traders exited positions in response to Bitcoin’s price decline. Only a few projects managed to post gains of more than 3% on Thursday, while most tokens in the top 200 recorded losses.
Notable gainers for the day include Joe (JOE) with a 37.9% increase, Maker (MKR) with a 9.67% gain, and Amp (AMP) with a 6.1% increase. On the other hand, Sei (SEI) saw the largest drawdown with a 13.6% decrease, followed by UniBot (UNIBOT) with a loss of 10.4%, and Merit Circle (MC) with a decline of 9.3%.
Conclusion
The cryptocurrency market has corrected lower as the momentum from the Grayscale vs. SEC case has subsided. The SEC’s delay in ruling on Bitcoin ETF applications has also contributed to the selloff. Bitcoin’s price experienced a steep sell-off, erasing the gains from the previous days. Technical analysis suggests that Bitcoin needs to hold above the $26,500-26,800 level to see a bullish breakout.
