Bitcoin could reach its highest since the Luna meltdown next, one trader argues, while others feel that the bottom is not yet in.
Bitcoin (BTC) circled $30,000 on May 18 after fresh comments from the United States Federal Reserve sparked volatility.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Analyst: Extra Fed rate hikes “biggest risk”
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD consolidating within a range in place since May 12.
The pair had come unstuck as Fed Chair Jerome Powell delivered economic policy insights during the Wall Street Journal’s Future of Everything Festival.
“I don’t know if financial conditions have tightened more than this in a very long time,” he told the paper’s chief economics correspondent, Nick Timiraos, in an interview.
Powell appeared to confirm that 50-basis-point key interest rate hikes would continue in subsequent meetings of the Fed’s Federal Open Markets Committee (FOMC) and could reach “neutral” levels in Q4. Hikes afterward, however, could nonetheless continue if necessary to tame inflation further.
With traditional markets already pricing in such a scenario, volatility overall was limited as Powell avoided surprises.
BTC/USD saw a brief drop to $29,500 before recovering during Powell’s words.
With risk assets set for difficult times as financial tightening continues, however, crypto market commentators had little by way of highly bullish news.
“Hawkish reminder. This is the biggest risk for markets,” macro analyst Alex Krueger responded in a series of Twitter posts on the potential for ongoing rate hikes into next year:
This is what I'm looking at, we reclaim $34.5k and I think there is good reason to be bullish towards at least $44k.
While we're below $34.5k beartarding is allowed, above there less so. pic.twitter.com/CzLY89rPAa
— DonAlt (@CryptoDonAlt) May 17, 2022
An increasing number of players, as Cointelegraph recently reported, still favor a return below the $23,800 lows seen last week at the height of the Terra (LUNA) and TerraUSD (UST) implosions.
“Bottoms take time to form, so do not expect it within the next day or two,” trader Crypto Tony told Twitter followers on the day:
“Likely we will find support, bounce for some relief and to trap late shorts and continue the trend.”
Others, meanwhile, feel that a $20,000 retreat is unlikely.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
