Existing market weakness was compounded by an announcement from U.S. regulators concerning Ethereum (ETH) staking, with major crypto exchange Kraken forced to suspend its staking operations and pay a $30 million fine.
Bitcoin fell to three-week lows as a result, with traders eyeing potential retests of $20,000 and even $19,000 to come.
On the day, stocks offered little by way of comfort to risk asset traders, with the S&P 500 opening down to cross a significant line in the sand left over from late last year.
U.S. dollar strength also bided its time, with a hopeful take from Investment research resource Game of Trades eyeing resistance which it may fail to overcome.
“USD has been rejected from its macro uptrend line that’s now turned to resistance. Confirmation is key though,” it summarized on Twitter.
U.S. dollar index (DXY) annotated chart. Source: Game of Trades/ Twitter
Scott Melker, known as “The Wolf Of All Streets,” meanwhile saw cause for optimism on 4-hour timeframes when it came to Bitcoin. A comeback could still materialize if it were accompanied by a rebound in relative strength index (RSI) values.
“This looks ripe for a bounce. RSI oversold with potential bullish divergence,” he told Twitter followers in a fresh update.
“Need to wait until the next candle close and see if we get an ‘elbow up’ on RSI. Testing 200 MA for first time since Jan 6th. $21,646 is also key support, exactly where price bounced.“
In his latest research piece released on the day, Macleod warned that macroeconomic conditions were apt to repeat behavior from a year earlier, at the start of the Russia-Ukraine conflict.
This specifically would involve a rerun of the commodity and energy price increases still being felt by consumers — but also a bull run for gold.
“At this time last year, gold began a rapid rise to $2070 and oil traded up from $85 to $120 when Russia attacked,” he wrote.
“It is amazing that markets are ignoring the very clear signals that the conditions which led to commodity and energy prices soaring last February are in place to happen again.”
XAU/USD vs. BTC/USD chart. Source: TradingView
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