The price of bitcoin (BTC) hovered around $30,000 on May 18 after further comments from the US Federal Reserve sparked volatility.
Analyst: Additional Fed Rate Hikes ‘Biggest Risk’
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair is consolidating within a range in place since May 12.
The chairman of the Fed, Jerome Powell expressed his economic policy ideas during the Wall Street Journal’s Festival of the Future of Everything.
“I don’t know if financial conditions have tightened more than this in a long time,” he told the paper’s chief economics correspondent, Nick Timiraos.In an interview.
Powell seemed to confirm that interest rate increases of 50 basis points would continue in the following meetings of the Federal Open Markets Committee (FOMC) of the Fed and could reach “neutral” levels in the fourth quarter. However, further hikes could continue if they are needed to further control inflation.
Given that traditional markets already anticipate this scenario, volatility was generally limitedso Powell avoided surprises.
The BTC/USD pair briefly dipped to $29,500 before recovering during Powell’s words.
Nevertheless, Cryptocurrency market commentators have not had much encouraging news as risk assets face tough times as financial tightening continues.
“Aggressive reminder. This is the biggest risk to the markets,” macro analyst Alex Krueger responded. in a series of Twitter posts on the possibility of continuous rate hikes until next year:
“Each Fed official has a different view of what is ‘neutral.’ Estimates are between 2% and 3%. Futures markets are already priced at 3.25% for December.”
According to CME Group’s FedWatch Tool, markets expect the target rate to be between 275 and 300 basis points at the December FOMC meeting.
It would make sense for the price of bitcoin to hit $33,000
In the short term, some saw continued relief for BTC.
“Bitcoin made a nice close above the $28,800 range low, as well as the $30,000 low that marked the initial wick to the downside in May 2021. The next resistance for HTF is the $33,000s zone. A test of that area would make sense.”, summarized the popular Daan Crypto Trades trading account in its latest BTC-focused update.
For its part, the companion account DonAlt highlighted the $34,500 level as a crucial breakout point for a more bullish outlook on BTC to come in.
This is what I’m looking at, we reclaim $34.5k and I think there is a good reason to be bullish towards at least $44k.
While we’re below $34.5k beartarding is allowed, above there is less so. pic.twitter.com/CzLY89rPAa
— DonAlt (@CryptoDonAlt) May 17, 2022
Let’s talk about BTC. Here’s what it looks like to me: If we break back towards the $34,500 level, I think there will be good reason to be bullish on it going to at least $44,000. As long as we are below the $34,500 level beartarding is allowed, above there less.
As Cointelegraph reported, a growing number of traders still favor a return below the $23,800 lows seen last week at the height of the Terra LUNA and TerraUSD (UST) implosions.
“Lows take time to form, so don’t expect it in the next day or two,” said Crypto trader Tony on Twitter back in the day.
“We are likely to find support, a bounce point to get some relief, catch the late shorts and then trend continues.”
Others, meanwhile, are of the opinion that a pullback to the $20,000 level is unlikely.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment and trading involves risk, so you should do your own research when making a decision.
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