Bitcoin crashes below $27,400, removing $60 billion from the crypto market cap

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(Kitco News) – The deeper correction many had predicted for the crypto market came on Monday as congestion on the Bitcoin (BTC) network led to a pause in BTC withdrawals from Binance, sending crypto prices tumbling as investors grew frustrated over delayed transactions and increased transaction costs.

Shares were similarly under pressure in trading to start the week as investors are now focused on the upcoming inflation report – which could provide a clue to the future of rate hikes – and have grown increasingly anxious about the ongoing debt ceiling debate. At market close, the S&P and Nasdaq finished in the green, up 0.05% and 0.18%, respectively, while the Dow was in the red, down 0.17%.

Data provided by TradingView shows that Bitcoin’s price started to fall with the opening candle on Monday, first finding support at $28,000 before the bears doubled their bets and managed to drop the top crypto to a low of $27,375 in the late afternoon. Bulls have since bid BTC back above $27,600, where they are now battling bears for control of the price action.

BTC/USD Chart by TradingView

The weakness in BTC sent May Bitcoin futures trading “solidly lower in early US trading,” according to Kitco senior technical analyst Jim Wyckoff, who said “trading remains choppy and sideways in range.

BTC/USD futures 1-day chart. Source: Kitco

“The bulls and bears are back on a neutral overall technical playing field in the near term,” Wyckoff said. “The direction that prices move above or below the range defined by resistance and support lines seen on the chart will most likely be the direction of the next sustained trending price move.”

For the analysts at Eight Global, the tightening coil for Bitcoin means that a “decision time is approaching for BTC, as there is only limited leeway left. Although there is a slight negative divergence, the chart pattern seems somewhat on the positive side.”

BTC/USD 1-Day Chart. Source: Eight Global

But the fact that meme coins have surged higher recently, with centralized exchanges more than willing to list tokens and capture the trading fees, is a signal to Eight Global that the market has become frothy and is due for a significant correction .

“First, the market is just giving the Genslers of the world what they’ve been advocating all this time: crypto is an immature zoo and the monkeys are running loose again, time for some taming,” the analysts warned. “Unfortunately, meme coin rushes and blankets don’t happen during market bottoms, they start near (local) market tops.”

Eight Global said that it is possible that a major FUD (Fear, Uncertainty and Doubt) event is likely to emerge that could start the C wave outlined on the chart above, driving the price of Bitcoin below $25,000.

“It wouldn’t surprise me if the C-wave I expect starts from some kind of fud,” Eight Global wrote. “Give the market the ‘reason’ it needs for this oft-repeated corrective structure.” Until enough time passes to determine which way price will move, Eight Global said, “long the support trend line,” take profits on winning long positions and “short the resistance trend line.”

Altcoins are getting hammered

The turmoil for Bitcoin led to widespread losses in the altcoin market, with only six tokens out of the top 200 managing to post positive gains for the day.

Daily performance in the cryptocurrency market. Source: Coin360

RSK Infrastructure Framework (RIF) was the only notable exception to the decline, with the token gaining 12.13% to trade at $0.1627. Recent meme coin breakout star Pepe (PEPE) was hardest hit by Monday’s decline, falling 35% to trade at $0.0000001847, while Magic (MAGIC) fell 16.88% and SingularityNET (AGIC) fell 15 .31%.

The total cryptocurrency market cap is now at $1.134 trillion, and Bitcoin’s dominance rate is 46.9%.