Bitcoin (BTC) and cryptocurrency prices remained stuck in a holding pattern ahead of Wednesday’s highly watched Federal Reserve interest rate decision, which could come with a 9,000 bomb. billions of dollars.
Some specialized media even speaks of a “catastrophe” to come for the course of Bitcoin, with solid sources.
Bitcoin price struggled in the early months of 2022 as central bank monetary tightening squeezed assets across the board. The Fed is expected to hike rates by 50 basis points – the biggest rate hike in 22 years – to temper runaway inflation.
Today, a seasoned trader warned that the price of bitcoin could drop as low as $28,000, a drop of $10,000 per bitcoin from its current price, despite historical data suggesting May could be a strong month for bitcoin .
Chairman of the Federal Reserve, Jerome Powellwill hold a press conference after the decision on the … [+] of interest Wednesday. Fears of Fed tightening weighed on bitcoin prices and stock markets.
“The completion of a bearish channel usually results in a drop equal to the width of the channel or in this case a hard test at around $32,000 – I would say $28,000,” posted Peter Brandt, managing director of the service. Trading Factor, on Twitter, next to a chart showing the downward trend in bitcoin’s price.
With bitcoin, cryptocurrencies and stock markets on high alert ahead of the Fed’s interest rate decision, traders are paying even closer attention to comments from Fed Chairman Jerome Powell, who will speak at a news conference following the release of the release at 2 p.m. ET.
“Fed meetings always signal uncertainty and volatility, which can impact not just digital assets, but broader markets as a whole,” said Eric Chen, managing director of the protocol developer. decentralized exchange Injective Labs, in emailed comments.
“But crypto markets are more attached to the underlying technology and value of projects and broader market trends over time have only proven that fact. »
Looking at recent trends, May is historically the fourth best month for bitcoin, according to Coindesk analysis, and the price of bitcoin has advanced in seven of the past eleven years.
The price of bitcoin crashed after hitting an all-time high of nearly $70,000 per bitcoin in November last year. [+] November last year.
“In terms of seasonality, May is considered a relative success for BTC. Over the past 11 years, bitcoin has ended the month up seven times and down four times,” FxPro senior market analyst Alex Kuptsikevich said in emailed comments.
Bitcoin price has bottomed out over the past few weeks, repeatedly touching support at around $38,000 as positive bitcoin and crypto developments are underway.
The Central African Republic has followed El Salvador in adopting bitcoin as legal tender, while Panama has signaled its growing interest in crypto. Last week, Wall Street giant Goldman Sachs offered its first-ever bitcoin-backed lending facility, which Bloomberg called a “significant milestone.”
“I remain convinced that crypto is the most optimal hedge against these macro issues, which is why institutional interest in this sector has only grown,” Chen added. “Both venture capital funding and fund deployments in crypto are experiencing one of the fastest surges since the inception of bitcoin. »
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