Cryptocurrency market commentators have not had much encouraging news as risk assets face tough times as financial tightening continues.
The price of Bitcoin (BTC) hovered around $30,000 on May 18 after further comments from the US Federal Reserve sparked volatility.
Data from Cointelegraph Markets Pro and TradingView showed the BTC/USD pair consolidating within a range in place since May 12.
Analyst: Additional Fed Rate Hikes ‘Biggest Risk’
Fed Chairman 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 gotten tighter 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 hikes 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.
With traditional markets already anticipating this scenario, volatility was generally limited, so Powell avoided surprises.
The BTC/USD pair briefly dipped to $29,500 before recovering during Powell’s words. However, cryptocurrency market commentators have not had much encouraging news as risk assets face tough times as financial tightening continues.
“Angry reminder. This is the biggest risk to the markets,” macro analyst Alex Krueger responded in a series of Twitter posts about the possibility of continued rate hikes into next year.
Krueger further explained that, “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 the 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 Bitcoin Price 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 zone would make sense,” popular trading account Daan Crypto Trades summarized in its latest BTC-focused update.
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Likewise, fellow account DonAlt highlighted the $34,500 level as a crucial breakout point for a more bullish outlook on BTC to enter. A post on Twitter highlights that, “this is what I’m looking at, we reclaim $34.5k and I think there is good reason to be bullish towards at least $44k. While we’re below $34.5k beartarding is allowed, above there less so.”
As Cointelegraph reported, a growing number of traders still favor a return below the lows of $23,800 seen last week at the height of the Terra LUNA and Terra USD (UST) implosions.
“Lows take time to form so don’t expect it in the next day or two,” Crypto trader Tony said on Twitter on the day.
Tony added that, “we are likely to find support, a bounce point to get some relief, catch the late shorts and then trend continues.”
Others, meanwhile, estimate that a pullback to the $20,000 level is unlikely.
By Audy Castaneda
