Bitcoin limps into FOMC as flagging volume raises BTC price hurdles
Bitcoin (BTC) hit daily lows at the Wall Street open on May 3 as markets counted down the hours to the Federal Reserve’s interest rate decision.
The Fed will step into the banking crisis
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $28,152 on Bitstamp, down 2.2% from the day’s highs.
The pair continued volatility into the May 3 meeting of the Federal Open Market Committee (FOMC), the event that accompanies interest rate adjustments.
As Cointelegraph reported, market sentiment has priced in a 90%+ chance of the Fed hiking 0.25% to copy the March moves, with little expectation of a surprise instead.
The odds of the hike materializing were at 83% at the time of writing, according to the CME Group’s FedWatch Tool, around 15% lower than the day before.
As in March, however, the Fed will enter a banking crisis exacerbated by already high interest rates. Several regional bank shares in the US fell significantly the day before, raising concerns that the crisis has gone nowhere.
“The regional banking sector, KRE, just posted its third-biggest daily drop of this crisis, down nearly 7%. Yet we still haven’t received any comments from the FDIC or the Fed,” financial commentary resource, The Kobeissi Letter, told Twitter followers on the day.
“In fact, the Fed is expected to raise interest rates again today. Meanwhile, no major headlines are reporting on the crisis anymore. The lack of attention to what is happening to our system is incredibly worrying.”
Kobeissi was referring to the US SPDR S&P Regional Banking ETF, down more than 30% so far this year.
Arthur Hayes, former CEO of crypto derivatives giant BitMEX, took a similarly gloomy view, predicting the demise of several regional banks this week in a copycat move following the closure of First Republic Bank over the weekend.
“PACW indicates down 10%. Oh baby! Are they coming by Friday or does the Fed have a surprise for us?” he asked in a subsequent tweet.
“Isn’t it great that there is such a robust banking system in the Pax Americana?”
Little hope of a Bitcoin price breakout
Despite the bank jitters, Bitcoin stayed aloof, failing to capitalize on sentiment and staying firmly within an established trading range.
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“No doubt BTC has lost some momentum. It’s fluctuating at the moment and whatever happens from here on out will determine the market structure and probably the next big move,” popular trader Daan Crypto Trades in summary.
“Above $30K would continue the bullish trend. Below $27K would provide a bearish market structure.”
Co-dealer Pentoshi revealed a downside target of around $25,000 for his next potential trade, while Elizy offered two zones closer to the spot price where he would “pull the trigger.”
Trader Crypto-ROD, meanwhile, shared a more optimistic short-term BTC/USD roadmap.
Firm bullishness was hard to find among commentators, however, with trader Justin Bennett noting declining volume as a clear warning sign of flagging upside potential.
“I would like to know how so many people think Bitcoin will reach $100k or even $50ki year when the volume looks like this,” he argued on May 2.
“A rally on declining volume = exhaustion.”
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
