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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

Why Sell In May Might Not Work This Time For Bitcoin

Reynaldo Marquez
Reynaldo Marquez
3 years ago
2 mins read
Bitcoin

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Bitcoin pushes up on the last day as the market prepares for the upcoming speech from the U.S. Federal Reserve (FED) Chairman Jerome Powell. Despite the recent gains, the general sentiment in the crypto market remains bearish.

Related Reading | Bitcoin Seen Dropping To $32K – But Not This Month – As Analyst Sees It Hitting $48K

At the time of writing, Bitcoin trades at $38,800 with a 1.5% profit in the last 24-hours.

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

The first cryptocurrency by market cap could surprise market participants. Some operators have started predicting a massive crash ahead of Powell’s intervention.

The old market adagio “Sell in May and go away” seems more present than ever as the sentiment turns fully fearful. In a recent report, trading firm QCP Capital revealed their chain is biased as the bearish sentiment seems “slightly over-extended”.

In that sense, the firm claims that market participants could have priced in any FED announcement “too aggressively”. Thus, if the financial institution seems dovish or announces an interest rate hike within expectation, the crypto market could be poised for some relief. QCP Capital said:

With bearish sentiment at extremes, we could see a potential short squeeze in the near-term. This might be the rally we have been waiting to sell into as the multiple-compressing effect from QT and recessionary pressures from the rate hikes begin playing out (…).

This could take some months before it comes into effect. In the meantime, BTC might break back above the $40,000 levels.

As NewsBTC reported, there are two scenarios for global markets in 2022. An aggressive or dovish FED. The latter is the best for the price of Bitcoin and other risk-on assets.

Why Bitcoin Could Benefit From Market Anticipation

The financial institution could be softer at the execution of its monetary policy if the market reacts ahead of future announcements. QCP Capital believes this is already happening:

(…) price reactions in anticipation of the FED are effectively serving the FED’s goals. Powell said on 21 April that he was pleased that markets have reacted to the FED’s hawkish indications. (…) we have seen some of the largest moves across markets in years.

The firm claims that market participants expect as much as 75 basis points (bps) interest rate hikes. This is a highly aggressive approach which means that anything below that could be beneficial for Bitcoin and the crypto market.

In that sense, QCP Capital claims the market is doing the FED’s job by keeping prices down and reacting to announcements. The firm added: “this gives the FED more breathing room in their fight against inflation”.

Moreover, QCP Capital believes inflation might be finally reaching a peak. Thus, why the FED might dial down on its rhetoric, or at least it will allow it to stay within expectations.

Related Reading | Bitcoin Taker Buy-Sell Ratio Rebounds Back Into “Hold” Zone

In case of potential downside ahead of Powell’s speech, the firm pointed at BTC’s price 50% retracement from its all-time high around $36,400 and its 61.8% retracement at $28,700.

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Reynaldo Marquez
Reynaldo Marquez

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.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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