Bitcoin (BTC) battled to maintain support at $28,000 on May 2 after the month opened at multi-day lows.
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it returned to the $28,000 mark on Bitstamp. The previous day’s Wall Street opening had brought in the latest wave of downside volatility, with the pair dipping below $27,700. This followed a leg lower immediately after the weekly and monthly close, with $30,000 and upward feeling increasingly out of reach.
Market participants’ BTC price targets reflected the mood. Michaël van de Poppe, founder and CEO of trading firm Eight, argued that a rematch with both $25,000 and $30,000 was still on the table. He said in a tweet, “Nothing is for certain, but sweep done on Bitcoin, breaking through $28.4K,and we could be back to $30K in a few days. Not breaking and folding coming days, $25K next. Big volatility on the horizon.”
In another post referring to the May 3 Federal Reserve decision on interest rate policy, van de Poppe described Bitcoin as being “in sideways territory, where bears and bulls have arguments for both biases.” “Lots of fear going into the event of the FED tomorrow, probably unwarranted, but we’ll see. Expecting slightly deeper,” he added.
As for the Fed event, little was left to the imagination, with market sentiment beyond crypto pricing in an almost guaranteed 0.25% rate hike. The odds as of May 2, according to CME Group’s FedWatch Tool, stood at 97.4%. This will follow the Fed’s March decision, which, like now, was accompanied by turmoil in the United States banking sector. On May 1, multiple local banks saw a decline in value in an environment strongly reminiscent of events six weeks prior.
However, unlike back then, Bitcoin appeared in no mood to capitalize on the fallout. It appears that little has changed in the crypto market despite recent turmoil in the U.S. banking sector. Bitcoin has been trading in a narrow range recently, with traders questioning whether the virtual currency will move higher or lower. The current market sentiment is mixed, with both bulls and bears having strong arguments for their respective positions.
Several factors could impact Bitcoin’s price movement in the coming days, including the Federal Reserve’s interest rate decision and the ongoing troubles in the traditional banking sector. While the Fed’s decision is likely to have a broad impact on the financial markets, it remains to be seen how much it will affect the cryptocurrency sector.
The upcoming interest rate decision comes at a time when the stock market continues to be on a rollercoaster ride, with significant fluctuations in prices. This volatility in the stock market could have an impact on Bitcoin’s price, as many traders use cryptocurrencies as a hedge against traditional stocks. However, if the Fed’s decision results in a significant shake-up in the financial markets, it could create further uncertainty for cryptocurrencies, including Bitcoin.
Looking ahead, another critical factor that could influence Bitcoin’s price in the short term is the ongoing geopolitical tensions between the United States and Russia. While crypto markets have historically been able to withstand significant macroeconomic headwinds, there is no guarantee that this will continue. If the situation between the two countries continues to deteriorate, it could lead to increased risk and uncertainty in financial markets, which could ultimately impact Bitcoin’s price.
In summary, several factors could impact Bitcoin’s price movement in the coming days and weeks. The Federal Reserve’s interest rate decision, ongoing troubles in the traditional banking sector, the rollercoaster stock market, and geopolitical tensions all have the potential to affect the virtual currency’s value. While it is unclear what direction Bitcoin will take in the short term, one thing is certain – the cryptocurrency space is likely to continue facing significant volatility.