Bitcoin trader keeps $40.8K BTC price target amid warning over risk asset ‘pain trade’

Bitcoin (BTC) consolidated below $40,000 on May 5 after enthusiasm for US economic policy hit a one-week high.

BTC/USD 1-hour candlestick chart (Bitstamp). Source: TradingView

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.

“A good structure for any bullish momentum that starts here.”

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.

Related: Bitcoin Pushes To $40K, But Are Bulls Strong Enough To Win Friday’s $735M Options Expiration?

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.

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.

BTC/USD annotated chart. Source: Whalemap/Twitter

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