Bitcoin (BTC) is holding up for the time being and is now consolidating back into a known range. The price also hung in this area for a long time at the beginning of this year. Fear and uncertainty are still high in the market, and the coming days may be exciting.
Bitcoin price drops by 1%
From bitcoin price fell all the way to $38,000 last week and even dipped below that for a while. Bitcoin recovered to $39,000 yesterday morning but failed to break through. The price then corrected to $38,500 and made a small bounce, but was rejected again at around $39,000.
Then bitcoin plummeted all the way to $38,200. Bitcoin again made a small bounce, but this time the price did not go much further than $38,700. Bitcoin then corrected back to that $38,500 where the price has been consolidating for the past few hours. The BTC price is at $38,600 at the time of writing KuCoin and €36,700 on Battle† As a result, the share price is currently 1% in the minus.
FOMC meeting today and tomorrow
Bitcoin is currently more stable than stock markets such as the Nasdaq and S&P 500, with which the price still has high correlations. Bitcoin recently fell less sharply than both stock markets, but stalled yesterday as these markets turned green.
Meanwhile, the US dollar index (DXY) also hangs somewhat. It may be the calm before the storm, as the next Federal Open Market Committee (FOMC) meeting is scheduled for later today and tomorrow. The decision by the Federal Reserve could have a major impact on the prices of more financial markets.
Typically when the Fed starts raising rates the bond yields start to top off and come down.
Is it going to be different this time?
Or is the 40 years downtrend in yields about to resume?
For sure if you are playing the odds the bet is to go long bonds. pic.twitter.com/p6916Adh4L
— ecoinometrics (@ecoinometrics) May 3, 2022
Bitcoin Analysts Are Getting More Bearish
Bitcoin may have touched the bottom of its trend channel last week, but we don’t see a convincing one yet rebound. The price may now even fall outside this channel. Nevertheless, several analysts report that they now expect a recovery, but whether the price has enough momentum to break out is questionable.
If bitcoin does manage to climb out of this range, there still seems to be a good chance that bitcoin will be rejected at one of the resistance levels that are just above the current price. That could be the area around $39,600-$40,000 or $40,700-$41,000. If bitcoin does break through this, the price could potentially retest $42,000-$43,000.
$BTC showing some good signs on the daily with bull divs in MACD, OBV and RSI. Predator is now teal, Terminator green with Willy oversold. First resistance to clear $38,800 at the moonraker followed by $39,600 then $40,900. https://t.co/k56shuKWzV
— Decentrader (@decentrader) May 3, 2022
However, more and more analysts are now fearing that bitcoin will be rejected again and then the price may fall lows retesting from the past year. That could be $35,000, $33,000, $30,000, or even $28,000.
The completion of a bear channel typically results in a decline equal to the width of the channel, or in this case a hard test of 32,000 or so — my guess is 28,000
This does NOT make me a hater $BTC pic.twitter.com/tTtuALZvSt– Peter Brandt (@PeterLBrandt) April 30, 2022
Largest capitulation ever among long-term BTC holders
Meanwhile, people are reporting some conflicting on-chain dates. According to the founders of analytics company Glassnode, we are seeing another familiar pattern playing out. This is because short-term holders buy their BTC out of panic against loss while long-term holders accumulate more BTC.
#Bitcoin long-term accumulation continues.
Panicking short-term holders realized losses while the long-term holder net position change increased.
👉 https://t.co/bjtPkZNNz2 pic.twitter.com/FxKBKo2n61— 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 (@Ninetropic_) May 2, 2022
However, Glassnode itself reports that the long-term holders are currently also capitulated. In fact, it is the largest capitulation among long-term holders ever in the entire history of Bitcoin:
#Bitcoin Long-Term Holders continue to capitulate, with a huge divergence between their purchase price (blue) and their selling price (pink).
This is the largest LTH capitulation in #Bitcoin history.
Read more in The Week On-chainhttps://t.co/B7PRFrDZV6
h/t @TXMCtrades pic.twitter.com/9oTU5QqC3g
– glassnode (@glassnode) May 2, 2022
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