Is Bitcoin price flashing at 57k? Here’s why these steps are key
Bitcoin (BTC) hit a two-month low at the May 1 Wall Street open as risk assets braced themselves for the next US macro move.
Bitcoin Volatility Cools to FOMC
Data from Cointelegraph Markets Pro and TradingView followed Bitstamp's $56,500 low BTC price action after hours.
Traders were hedging on risk assets ahead of the US Federal Reserve's next interest rate announcement and Chairman Jerome Powell's press conference.
Market participants were hoping Powell's tone would not be too dovish after the Federal Open Market Committee (FOMC) meeting after the quarterly returns announcement, or QRA, hurt the US liquidity outlook.
“The FOMC statement and Powell's press release this afternoon will confirm a very warm policy normalization cycle for the US dollar money market this afternoon,” Darius Dale, founder and CEO of 42Macro risk management firm, wrote in a digest on X.
“As much as Chairman Powell prefers to play double-edged risks for the economic outlook, the reality is that the preponderance of evidence supports the ‘no delay' scenario as the most likely outcome.” So, ‘higher for longer' may be the dominant message today.
The latest data from CME Group's FedWatch Tool underscored the lack of expectations for good news, with the Fed's odds at current levels at 99%.
Striking a more optimistic note, popular trader CrypNuevo suggested that the worst of Bitcoin and altcoin losses could be outright.
“BTC has really fallen and this reinforces the idea that it can be valued regardless of what Jerome Powell says today,” he told X subscribers.
“Shall we try the lower range again?”
In its latest edition of London and New York's daily color market updates sent to Telegram channel subscribers, meanwhile, trading firm QCP Capital noted that both Powell and QRA may hold risk-on sentiment.
“There are two important events happening today that could exacerbate or reverse this depression movement,” he said.
“First, if Powell is dovish at the FOMC, it could provide a bullish reversal. Second, if the QRA (Quarterly Returns Announcement) sees heavy spending on US Treasuries (front-end) instead of the 10-year (back-end), the risk of longer-term rate hikes will increase.” decrease and may cause some brake on the USD rally”.
BTC price in reference to a “normal” bull market
After many lines in the sand have fallen, Bitcoin traders have seen important BTC price levels.
Related: Why Is Bitcoin Price Down Today?
“This current Bitcoin recovery is slowly turning into a 50-day retracement,” noted trader and analyst Rect Capital.
The accompanying chart compares BTC's price reversal to the bull market that began in early 2023.
Rect Capital described the recent decline of more than 20% as “normal” in this context.
“The usual repetitions are 2-3 weeks, longer ones up to 2 months,” he said.
Filbfilb, co-founder of the trading group DecenTrader, meanwhile, predicts a Bitcoin renaissance that may follow the footsteps of gold in recent years.
“I think we could go lower on that chart, but if there's an eclipse in the coming months, it could be like this as a general idea,” he wrote on an X thread comparing the two properties.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
