Markets trade mixed as Nvidia hype fades, inflation worries return
The cryptocurrency market ended the week mixed as Bitcoin (BTC) continued to trade sideways above $51,000 while select altcoins surged higher in the wake of major protocol updates, artificial intelligence-driven hype, and the potential for a governance restructuring for Uniswap (UNI), the largest decentralized exchange.
Stocks also traded mixed as the momentum generated by the blowout earnings report from Nvidia waned, although the chip manufacturer set a new record from the biggest single-day gain in Wall Street history after its market cap increased by $277 billion on Thursday.
As the Nvidia distraction fades, the reality of persistent inflation and higher for longer interest rates have resurfaced in the minds of investors, who are now looking to take a more measured approach to investing in the market, leading to weakness on Friday.
At the market close, the S&P was flat, the Dow gained 0.16%, and the Nasdaq finished down 0.28%.
Data provided by TradingView shows that Bitcoin largely traded near the $51,000 handle on Friday, with bears making an afternoon attempt to push its price lower, which bulls soundly rebuffed. At the time of writing, BTC trades at $51,020, a decrease of 1.1% on the 24-hour chart.
BTC/USD Chart by TradingView
According to Kitco senior technical analyst Jim Wyckoff, “This week’s price action shows a pause in an existing uptrend, which is common and is not bearish. The bulls still have the solid overall near-term technical advantage. There are no significant early technical clues that a market top is close at hand.”
Traders showing signs of exhaustion
Swing trader Roman noted on X that the weekly chart for Bitcoin shows a bearish divergence, which he said “is a sign of exhaustion, not continuation.”
“We will likely see some correction before higher,” Roman said. “I’m banking on a liquidity shift from $BTC to $ALTs during this correction. Be cautious.”
MN Trading Founder Michaël van de Poppe also urged caution, as sideways price action following a major run-up can often lead to a significant correction.
Some people state that I’m expecting a correction to happen at this point.
No, I’m not saying that in this tweet.
Do they happen?
For sure, every market will have them. When? We don’t know.
Just some general guidelines.
— Michaël van de Poppe (@CryptoMichNL) February 23, 2024
But the corrections offer a great opportunity for accumulation, Poppe said, especially for the current bull market cycle, which has yet to really see adoption by institutional investors.
“The institutional cycle is going to bring #Bitcoin to mass adoption and a likely price value of $300,000-600,000 per Bitcoin,” Poppe tweeted. “Hence why it’s super important to accumulate as much as you can. How? During 20-40% corrections.”
And according to a recent report from Matrixport, Bitcoin could reach the $63,000 mark by March, driven by inflows into spot BTC ETFs, hype surrounding the halving, and macroeconomic factors including anticipation for a rate cut by the Federal Reserve and uncertainty about the U.S. Presidential election.
Such periods of political uncertainty have traditionally seen investors gravitating toward alternative assets like Bitcoin to hedge against possible economic policy shifts, Matrixport said.
Overall, Matrixport’s analysis suggested that this unique convergence of regulatory developments, economic cycles, and market dynamics could propel Bitcoin to new heights.
Altcoin traders take profits
It was a mixed bag of performance for altcoins, with a majority of tokens in the top 200 recording losses on Friday as traders took profits on recent gainers but largely refrained from putting those gains back to work in the market.
Daily cryptocurrency market performance. Source: Coin360
The standout performance of the day came from Uniswap (UNI), which surged 50.4% on the back of a new governance proposal for the community to vote on. Other notable gainers include a 17.75% increase for Flare (FLR), a 16.35% gain for Siacoin (SC), and a 12.7% increase for dYdX (ETHDYDX). JasmyCoin (JASMY) was the biggest loser, declining by 17.2%, while Dymension (DYM) fell by 13.2%, and Helium Mobile (MOBILE) lost 10.6%.
The overall cryptocurrency market cap now stands at $1.95 trillion, and Bitcoin’s dominance rate is 51.3%.
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.
