Bitcoin (BTC) experienced some turbulence on May 3, hitting daily lows as investors anxiously awaited the Federal Reserve interest rate decision slated for later that day. Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching $28,152 on Bitstamp, down 2.2% from the day’s highs.
The pair continued to exhibit volatility leading up to the May 3 meeting of the Federal Open Market Committee (FOMC), the event that accompanies interest rate adjustments. Market sentiment had priced in a 90%+ chance of the Fed hiking 0.25%, similar to its March moves, with little expectations of a surprise. The odds of the hike materializing stood at 83% at the time of writing, according to CME Group’s FedWatch Tool, around 15% lower than the previous day.
However, as the Federal Reserve prepares to hike interest rates, the US banking system is still struggling to recover from the crisis exacerbated by high interest rates. Several United States regional bank stocks fell considerably the day before the Fed meeting, raising concerns that the crisis has gone nowhere. Arthur Hayes, former CEO of crypto derivatives giant BitMEX, held a similarly bleak view, predicting the downfall of several regional banks this week in a copycat move following the shutdown of First Republic Bank at the weekend.
Despite the banking angst, Bitcoin remained aloof, failing to capitalize on market sentiment and remaining firmly within an established trading range. “No doubt that BTC has lost some momentum. It’s currently ranging and whatever happens from here on out will determine the market structure and likely the next bigger move,” says popular trader Daan Crypto Trades. “Above $30K would continue the bullish trend. Below $27K would make for a bearish market structure.”
The lack of a significant movement in the price of Bitcoin has left traders mixed on its near future. Fellow trader Pentoshi revealed a downside target of around $25,000 for his next potential trade, while Elizy offered two zones closer to spot price at which he would “pull the trigger.” Meanwhile, trader Crypto-ROD shared a more optimistic short-term BTC/USD roadmap. Firm bullishness, however, was hard to find among commentators, with trader Justin Bennett noting decreasing volume as a telltale warning sign of flagging upside potential.
As always, investors and traders should conduct their own research before making any investment or trading decisions. This article is not an offer or solicitation of an offer to buy or sell any cryptocurrencies or financial instruments.