Bitcoin trader keeps $40.8K BTC price target amid warning over risk asset ‘pain trade’

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Bitcoin (BTC) consolidated under $40,000 on Might 5 after United States financial coverage pleasure noticed a  spike to one-week highs.

BTC/USD 1-hour candle chart (Bitstamp). Supply: TradingView

Fed sparks little crypto response

Knowledge from Cointelegraph Markets Pro and TradingView confirmed an in a single day peak of $40,050 on Bitstamp following feedback from the Federal Reserve and Chair Jerome Powell.

The U.S. central financial institution had conformed to market expectations with a 0.5% key charge hike, additionally suggesting that related repeat hikes would observe.

With that, a modest market rally left Bitcoin eerily missing volatility in what was a robust distinction to earlier Fed pronouncements on subjects equivalent to inflation.

Whereas many anticipated threat belongings en masse — together with crypto — to deflate under the new policy, not everybody believed that such a situation would trigger traders most discomfort.

“With so many individuals calling for soften ups and soften downs, perhaps the ache commerce is to cut sideways in threat belongings for a very long time,” economist Lyn Alden argued.

Bitcoin circles likewise weren’t anticipating main development modifications. Ben Lilly, a token economist at Jarvis Labs, highlighted low funding charges on BTC derivatives markets.

“Market noticed some reduction with Powell’s feedback. However will it proceed for the crypto market? To start out, funding charges have been unfavourable for an extended time frame. This tends to occur at vary lows,” he wrote in a collection of tweets:

“An excellent construction for any upward momentum that begins right here.”

Lilly added, however, that a lack of accumulation from whales at current price levels was “not what we hoped to see.“

“Max pain” for Bitcoin still far away

Focusing on lower timeframes, popular trader Crypto Ed held out for a fresh push above the $40,000 mark on May 5.

Related: Bitcoin pushes to $40K, but are bulls strong enough to win Friday’s $735M options expiry?

For him, BTC/USD was in line to hit $40,800, and whereas there have been “loads of causes” to low cost a extra important climb, it was nonetheless an possibility.

When it comes to BTC value capitulation situations, in the meantime, on-chain monitoring useful resource Whalemap repeated its previous assertion that the realm between $25,000 and $27,000 would represent “max ache” for Bitcoin hodlers.

“A variety of liquidity and cease losses are stacked there,” it explained as a part of Twitter feedback.

BTC/USD annotated chart. Source: Whalemap/ Twitter

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.