Bitcoin (BTC) consolidated below $40,000 on May 5 after enthusiasm for US economic policy hit a one-week high.
The Fed Sparks a Little Crypto Backlash
Data from Cointelegraph Markets Pro and TradingView confirmed an overnight high of $40,050 on Bitstamp following comments from the Federal Reserve and Chairman Jerome Powell.
The US central bank had matched market expectations with a key rate hike of 0.5%, also suggesting a repeat of similar hikes.
With that, a modest market rally left Bitcoin strangely devoid of volatility in what was a stark contrast to previous Fed pronouncements on topics like inflation.
While many expected risky assets mass — including crypto — to deflate under the new policy, not everyone believed that such a scenario would cause investors maximum discomfort.
“With so many people calling for mergers and mergers, perhaps the trade pain is to sideline risky assets for a long time,” economist Lyn Alden. plot.
Bitcoin circles were not expecting big trend changes either. Ben Lilly, token economist at Jarvis Labs, highlighted the low funding rates in the BTC derivatives markets.
“The market took some relief from Powell’s comments. But will it continue in the crypto market? Funding rates have been negative for a long period of time to begin with. This tends to happen in low ranges,” he wrote. in a series of tweets.
Lilly added, however, that the lack of accumulation of whales at current price levels “was not what we expected to see.”
The “maximum pain” for Bitcoin is still far away
Focusing on lower time frames, popular Crypto trader Ed held his ground for a fresh push above the $40,000 mark on May 5.
For him, BTC/USD was in line to hit $40,800, and while there were “plenty of reasons” to rule out a more significant rally, it was still an option.
2/2— Ed_NL (@Crypto_Ed_NL) May 5, 2022
No, this is not a bold call of $43.5k in 1 try and before the end of the week.
He will explain the above chart in today’s video.
This is the most ideal scenario, while there are many reasons to think that this is impossible.
I’ll try to do YT before 10am, otherwise early afternoon
Meanwhile, in terms of BTC price capitulation scenarios, on-chain monitoring resource Whalemap repeated its earlier claim that the area between $25,000 and $27,000 would constitute “peak pain” for Bitcoin users.
“A lot of liquidity and stop losses are stacked there,” he said. explained as part of the Twitter comments.
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