What might enrage investors more than stock and cryptocurrency surrender is sideways trading “for a long period.” After a one-week high in U.S. economic policy excitement, Bitcoin (BTC) consolidated below $40,000 on May 5.
The Federal Reserve has had minimal impact on the cryptocurrency market
Following statements from the Federal Reserve and Chair Jerome Powell, data from TradingView verified an overnight peak of $40,050 on Bitstamp. With a 0.5 percent key rate hike, the US central bank met market expectations, implying that further raises would be forthcoming.
Following that, a tiny market gain left Bitcoin with an eerie lack of volatility, in stark contrast to past Fed announcements on themes like inflation. While many expected risk assets, including cryptocurrency, to deflate as a result of the new policy, not everyone thought that such a scenario would bring investors the most pain.
“With so many people calling for meltups and meltdowns,” economist Lyn Alden suggested, “maybe the pain trade is to chop sideways in risk assets for a long period.” Similarly, no big trend shifts were expected in Bitcoin circles. Low financing rates on BTC derivatives markets were noticed by Ben Lilly, a token economist at Jarvis Labs.
“Powell’s remarks provided some respite to the market. Will this trend continue in the crypto market? To begin with, funding rates have been negative for quite some time. This usually happens when the range is at its lowest point “In a series of tweets, he expressed himself.
“This is a wonderful foundation for any upward momentum that starts here.”
However, a lack of accumulation from whales at current prices was “not what we intended to see,” according to Lilly.
Bitcoin’s “max agony” is still a long way off
Popular trader Crypto Ed held out for a further push above the $40,000 barrier on May 5, focusing on lesser timeframes. BTC/USD was on track to achieve $40,800 for him, and while there were “a lot of factors” to rule out a more large rise, it was still a possibility.
2/2
No, this is not a bold call for $43.5k in 1 go and before end of the week.
Will explain the chart above in today's video.
This is the most ideal scenario while there are plenty of reasons to think this is impossible.
Will try to do YT before 10am, otherwise early afternoon— Ed_NL (@Crypto_Ed_NL) May 5, 2022
Meanwhile, on-chain monitoring site Whalemap reiterated its previous prediction that the range between $25,000 and $27,000 would be “peak agony” for Bitcoin hodlers in terms of price capitulation scenarios.
As part of Twitter comments, it added, “A lot of liquidity and stop losses are stacked there.”
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
