Bitcoin Falls Below $66,000, Altcoins Crushed as Pre-Halving Pullback Intensifies

(Kitco News) – The crypto market slowdown intensified on Tuesday as Bitcoin (BTC) briefly fell below $65,000 while the total cryptocurrency market capitalization declined by $170 billion, translating into a loss of 4.6%.

Stocks also fell under pressure as a rise in the DXY led to weakness in financial markets, with the exception of gold, which hit a new record high above $2,277 an ounce. The prospect of a later-than-expected interest rate cut has contributed to the weakness, while persistent inflation has led some to worry that the Fed’s next move might actually be a rate hike.

At market close, the S&P, Dow Jones and Nasdaq all finished lower, down 0.72%, 1.0% and 0.95%, respectively.

Data provided by TradingView shows that Bitcoin’s price has fallen about 7.5% since Tuesday’s daily candle open, hitting a low of $64,550 around midday before buyers stepped in to push it back at $66,000.

BTC/USD Chart by TradingView

At the time of writing, BTC is trading at $65,900, down 5.25% on the 24-hour chart.

Trading and rebalancing

“Trading fundamentals (vs) market positioning is how I really see the current environment,” said Greg Magadini, director of derivatives at Amberdata, in a note to Kitco Crypto. “Certainly, I don’t have a clear conviction this week, except for a potential “selling the news” play.

Based on the “fundamental picture of BTC,” Magadini suggested “there are very good reasons to go long,” including the halving, which will take place between April 19 and 20, “the ETF flows outperforming all previous ETFs and expectations”, and the fact that Bitcoin has already reached a new all-time high – with “TradFi proxy gold as well”.

“That said, everyone seems willing to do it,” he noted. “I’m seeing a high futures base…the cost of long leveraged positions barely retraced before moving up again today. The options market is also pricing in the halving event.

“Without a proper breakout to new ATHs in BTC, we are unlikely to get a valuable gain for long call volatility buyers, given the decline in RV and growth in VRP,” Magadini added. “That said, the current positioning being so broad sets the market up for a VERY interesting halving cycle to ‘sell the news’.”

“Until the halving, I suspect the market favors long positions, but this remains a difficult decision given the market is already heavily invested,” he concluded.

According to According to MN Trading founder Michaël van de Poppe, there is a high probability that the peak before the halving will be reached for Bitcoin, and it is likely to consolidate lower before continuing higher after the halving A half.

And market analyst Rekt Capital said that today’s move shows that “Bitcoin is still technically in the half retracement phase of its cycle (dark blue circle),” before noting that “this phase consists to implement the following phase: the re-accumulation phase (red).

“This recent rejection of $70,000 has given us a better idea of ​​where the high resistance range of the reaccumulation (horizontal red) lies,” he said. “Now it’s a matter of determining where the lowest reaccumulation range (horizontal green) will be.”

“For now, the pre-halving retrace of -18% has potentially marked the bottom of this reaccumulation range,” concluded Rekt Capital. “If ~$60,000 continues to be the low… BTC could consolidate between $60,000 and $70,000 over the coming weeks, leading up to the halving and beyond.”

Altcoins slip deep into the red

The altcoin market was hit following Bitcoin’s pullback, with all but 15 tokens in the top 200 posting losses that day.

Daily performance of the cryptocurrency market. Source: Coin360

Ethena (ENA) bucked the downtrend to post a 27.7% gain, followed by an 8.4% gain for Litecoin (LTC) and a 7.5% increase for Bitget Token (BGB ). Reserve Rights (RSR) were the losers with a 14.7% drop, while Ankr (ANKR) lost 14.3% and Yield Guild Games (YGG) fell 14%.

The global market capitalization of cryptocurrencies now stands at $2.49 trillion and Bitcoin’s dominance rate is 52.2%.

Disclaimer: The opinions 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 such accuracy. This article is for informational purposes only. This is not a solicitation to trade any commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no liability for loss and/or damage arising from the use of this publication.

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