Whalemap repeats its earlier claim that the area between $25,000 and $27,000 will be the “ultimate pain” for Bitcoin hodlers.
The price of Bitcoin (BTC) consolidated below $40,000 on May 5, after US economic policy spiked to one-week highs.
Data from Cointelegraph Markets Pro and TradingView confirmed an overnight high of $40,050 on Bitstamp following comments from the Federal Reserve and Chairman Jerome Powell.
Fed Causes Little Reaction from Cryptocurrencies
The US central bank had adjusted to market expectations with a 0.5% rise in the key interest rate, also suggesting that similar increases would repeat.
With it, a modest market rally left Bitcoin with a disturbing lack of volatility, in contrast to previous Fed pronouncements on topics such as inflation.
While many expected risky assets en masse — including cryptocurrencies — to deflate under the new policy, not everyone believed that such a scenario would cause maximum investor discomfort.
“With so many people calling for melds and meltdowns, perhaps the pain trade is to cut risky assets sideways for a long time,” economist Lyn Alden argued.
Bitcoin circles were also not expecting big trend reversals. Ben Lilly, a token economist at Jarvis Labs, highlighted the low funding rates in the BTC derivatives markets.
“The market saw some relief thanks to Powell’s comments. However, will it continue for the crypto market? Funding rates have been negative for a long period, to begin with. This tends to happen at range lows,” he wrote in a series of tweets.
“A good structure for any bullish momentum that starts here.”
Lilly added, however, that the lack of accumulation of whales at current price levels “wasn’t what we expected to see.”
“Ultimate Pain” for Bitcoin Still Far Away
Focusing on lower periods, popular Crypto trader Ed grabbed on to fresh momentum above the $40,000 mark on May 5.
For him, the BTC/USD pair was in line to hit $40,800, and while there were “plenty of reasons” to rule out a more significant rally, it was still an option.
On Twitter, Ed posted the following, “Nice bounce last night, I remember some bears laughing about my targets last week (40.8k). I still think we go for that zone. However, let us not get too euphoric, past months we constantly saw deep retraces after every bounce.
He added that “No, this is not a bold call for $43.5k in 1 go and before the end of the week. Will explain the chart above in today’s video. This is the ideal scenario while there are plenty of reasons to think this is impossible. Will try to do YT before 10 am, otherwise early afternoon.”
In terms of BTC price capitulation scenarios, on-chain monitoring resource Whalemap repeated its earlier claim that the area between $25,000 and $27,000 would constitute the “ultimate pain” for Bitcoin holders.
“A lot of liquidity and stop losses are stacked there,” he explained as part of his Twitter comments.
By Audy Castaneda
