Reading 4 min Views 2 Published Updated
The Bitcoin bears have gained control over the past few weeks, at least in the short term, and the battle appears to be on. After Bitcoin fell again at $30,000 on Sunday in a “weekend pump”, the bears are aiming for $27,000.
At press time, Bitcoin was hovering around $28,000 having already tested key support at $27,800 last night (EST). The long-term trend is still clearly in favor of Bitcoin bulls, as indicated by the price above $25,000. However, in the short term, it is important to protect the $27,800 level to avoid a deeper correction to $25,000, which was also pointed out by analyst XO.
$BTC pic.twitter.com/OKS791fYEi
— XO (@Trader_XO) May 1, 2023
Bitcoin remains in a trading range
For technical analyst Mikael van de Poppe, founder of Eight Global, breaking $28,400 on a shorter time frame is a trend-setting price level. “Breaking past $28,400, we could be back to $30,000 in a few days. In the coming days, do not break or fold, 25 thousand dollars next time. There is more volatility on the horizon,” the analyst warns.
However, the current weakness that Bitcoin is showing hovering around $28,000 could be a sign that another swing of the lows is needed to create new upward momentum. “Still eyeing $27.8k as a potential long here or a $28.4 break and flip for Bitcoin,” van de Poppe notes.
Glassnode co-founders Yann Allemann and Jan Happel write in their latest analysis that Bitcoin’s April shutdown was an important signal for bulls. BTC closed in green for the fourth month in a row. According to analysts, the short-term trading channel is in the range of $27,000 to $29,200.
[B] but we are confident that we will soon exceed 30 thousand dollars. Our thesis gets stronger the longer we stay above the highly active $28k-$28.2k level. Note the large horizontal stripe.
Bitcoin trading range | Source: Swissblock analytics.
All eyes on the Fed
The key to price action in the coming weeks could be the FOMC meeting tomorrow, Wednesday, and the subsequent press conference by Fed Chairman Jerome Powell. The market is looking for a final 25 bps uptrend. This will bring the US benchmark interest rate to the same level as before the 2007 financial crisis.
However, the solution is probably already priced in. More important will be the FOMC press conference at 2:30 pm EST, when Powell will present his comments for the coming months.
The market will look to Powell’s comment that this was the last rate hike and that the first rate cut will come later this year (very unlikely). The focus will also be on Powell’s comments on the banking crisis and the worsening credit crunch.
Most likely, Powell will play both sides, as he did at the March FOMC meeting. Comments such as “inflation is not quite where we want it to be”, “monitoring developments in the banking sector” and “dependence on data” are practically guaranteed. On the bullish side, Powell could signal a pause in June and leave the door open for rate hikes if the data confirms it.
Lol … volatile day coming tomorrow, and perhaps a decisive trend setter for the coming weeks. The start of a new #Bitcoin rally? https://t.co/Dd8FWOjsDa
— Jake Simmons (@realJakeSimmons) May 2, 2023
At the time of writing, Bitcoin is trading at $28,100, which is below the average range after it deviated from the high of the range again. Prior to the FOMC decision, it seems rather unlikely that BTC will make a major move unless there is another short or long squeeze due to the frenzy in the futures market. Re-taking the upper range will be a bullish signal for the FOMC.
BTC price, 2-hour chart | Source: BTCUSD on TradingView.com.
