The bitcoin price has struggled through the first few months of 2022 as central bank monetary tightening squeezes assets across the board. The Fed is widely expected to hike rates by 50 basis points—the biggest rate increase in 22 years—in order to temper soaring inflation.
Now, a veteran trader has warned the bitcoin price could fall as low as $28,000, down $10,000 per bitcoin from its current price—despite historical data suggesting May could be a strong month for bitcoin.
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“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,” Peter Brandt, the chief executive of trading service Factor, posted to Twitter alongside a chart showing the bitcoin price trending downward.
While bitcoin, cryptocurrencies and stock markets are on high alert ahead of the Fed’s interest rate decision, traders are even more closely attuned to comments from Fed chair Jerome Powell who will speak at a press conference following the 2pm ET release of the statement.
“Fed meetings always signal uncertainty and volatility, which may impact not only digital assets but also broad markets as a whole,” Eric Chen, chief executive of decentralized exchange protocol injective developer Injective Labs, said in emailed comments.
“But crypto markets are more attached to the underlying technology and value behind the projects and larger market trends over time have only proven that fact.”
Looking back over recent trends, the month of May has historically been the fourth-best month for bitcoin, analysis by Coindesk showed, with the bitcoin price making gains in seven of the past 11 years.
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“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,” Alex Kuptsikevich, senior market analyst at FxPro, said in emailed comments.
The bitcoin price has found a floor in recent weeks, repeatedly hitting support at around $38,000 as positive bitcoin and crypto developments roll in.
Central African Republic has followed El Salvador in adopting bitcoin as legal tender, while Panama has signaled it’s increasingly interested in crypto. Wall Street giant Goldman Sachs last week offered its first-ever lending facility backed by bitcoin, called a “significant step” by Bloomberg.
“I still believe crypto is the most optimal hedge against these macroeconomic issues which is why institutional interest in the industry has only continued to grow,” added Chen. “Both venture capital funding and fund deployments into crypto are soaring at one of the fastest levels since the inception of bitcoin.”
social experiment by Livio Acerbo #greengroundit #bitcoin – original source here