Bitcoin Gives Bullish Clues, Will The FED Meeting Get In The Way?

Reynaldo Marquez

1 year ago

2 mins read

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Bitcoin is still stuck in the $38,000 area with sideways movement during the past week. The first crypto by market cap has displayed resilience as traditional finances take a bearish turn.

At the time of writing, Bitcoin (BTC) trades at $38,400 with 1.1% losses in the last 24-hours.

Bitcoin BTC BTCUSD — BTC moving sideways on the 4-hour chart. Source: BTCUSD Tradingview

Tomorrow, the U.S. Federal Reserve (FED) branch Federal Open Market Committee (FOMC) will hold a meeting. Market participants expect the financial institution to announce a more aggressive shift in their monetary policy.

Two months ago, the FED hinted at an increase in interest rates by 25 basis points (bps). Tomorrow the increase could be set higher at 50 basis points (bps).

This will be the first 50 bps hike in over two decades, according to trading firm QCP Capital. The firm believes that Bitcoin and the crypto market have been suffering because of several factors.

These include a dropped in equities, with the NASDAQ Index and the S&P 500 recording 13% and 9% losses in 30 days. Bitcoin has been moving in tandem with big tech stocks. Therefore, the crash was expected, but not the subsequent strength.

The latter has been underestimated by market participants. The general sentiment in the crypto market seems bearish despite Bitcoin’s capacity to hold critical support at its current levels.

In addition to the macro-outlook, QCP Capital believes there has been an increase in negative headlines which contributed to the losses. Several DeFi protocols suffered exploits over the past week, and other networks experienced outages.

However, the trading firm noted the following:

In spite of the overall bearishness, we’ve actually been seeing decent upside demand both in the front-end as well as out to September and December.

In the options market, QCP Capital records an increase in demand for calls for Bitcoin at $40,000 in May. Thus, the cryptocurrency could rally in the coming days as the FED’s announcement seems to be priced in.

Bitcoin Shows Some Bullish Signals, But Doom Is Still In The Cards

Analysts from Material Indicators seem to support the short-term bullish thesis. This could provide Bitcoin with support to get back into the $40,000 levels.

As one analyst recorded, for the first time in a while, exchanges’ order books show that big players have been stepping up and buying into BTC’s current price action. In past months, the cryptocurrency has been able to bounce, but any rally has been rejected at critical resistance.

#FireCharts CVD is showing #BTC Whales and Mega Whales have been market buying in this range and a rounding bottom pattern is forming. A relief rally may be coming. Doesn't mean the macro bottom is in. #NFA #Crypto #tradingpsychology https://t.co/VzE3V2kA8Q pic.twitter.com/MmIyleHGer

— Material Indicators (@MI_Algos) May 3, 2022

Another analyst claims the U.S. dollar could present some losses as it trends downwards into “weak” support at $0.95 in the EUR/USD chart. The analyst said the following hinting at the possibility of another “dead cat” bounce and more downside price action for BTC:

Last time it hit one of these was in the first March week. BTC rallied afterwards. So, now that it hit another level, maybe BTC will give us another exit pump before doom?

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

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