The ongoing US banking crisis has taken spot gold to new heights, with Bitcoin price again reaching above $29,000. Reports say the Fed’s latest rate hike is preparing the market for another strong rally.
Bitcoin targets $30,000 after Fed rate decision
BTC price regained $29,000 overnight by May 4 as the US banking crisis risks spawning new victims. At the same time, more US bank stocks suffered as the Fed confirmed its much-anticipated 0.25% increase.
Popular crypto analyst Michaël van de Poppe said, “The biggest joke is that Jerome Powell says the banking system is thriving and is healthy, robust and resilient. It is the weakest of all and a few more banks are falling apart after the market.” Powell also drew attention to tighter loan conditions last night.
The biggest joke is the fact that Jerome Powell says that the banking system has improved and is healthy, sound and resilient.
It's the weakest it has ever been and another few banks have been falling apart after market.
This was the last hike.
— Michaël van de Poppe (@CryptoMichNL) May 4, 2023
Van de Poppe referred to Powell’s comments on the regional banking sector that accompanied the rate decision.
“Conditions in this industry have greatly improved since the beginning of March,” Powell said before the meeting. The US banking system is robust and resilient. We will continue to monitor conditions in this sector. We are determined to draw the right lessons from this incident. We will try to ensure that such incidents do not happen again,” he said.
US Regional Bank Stocks After Hours:
1. PacWest, $PACW: -60%
2. Western Alliance, $WAL: -30%
3. Metropolitan Bank, $MCB: -20%
4. Valley National, $VLY: -15%
5. HomeStreet, $HMST: -11%
6. Zions Bank, $ZION: -10%
7. KeyCorp, $KEY: -8%
8. Citizens Financial, $CFG: -5%…
— The Kobeissi Letter (@KobeissiLetter) May 3, 2023
Other analysts were far from convinced
Arthur Hayes, the former CEO of BitMEX, announced that he is going after regional banks that have already failed. He predicted that markets could depend on the next move by Powell or Treasury Secretary Janet Yellen.
In a related tweet, he wrote, “You never know what the trigger was that caused Yellen or Powell to give up and save everyone. Now everything is about politics and politics is more about power than rational decisions,” he said.
Financial commentator Tedtalksmacro also noted that the Fed funds rate is now at its members’ expected peak.
Back in March, the majority of FOMC participants said that the terminal rate for this tightening cycle would be 5-5.25% —> that’s where we are now. pic.twitter.com/50d4EMG7Fg
— tedtalksmacro (@tedtalksmacro) May 3, 2023
Important signals for Bitcoin
Back to Bitcoin: Retrieving 29,000 provided a much-needed boost against the recent price action. Tracking changes in the Binance orderbook, Material Indicators showed that whale purchasing power is gaining the upper hand with events:
After clearing most of the liquidity in the range prior to the FOMC Fed rate hike announcement, BTC whales had no problem eating up the remaining liquidity and reclaimed $29,000.
Thus, market participants expected that a liquidity squeeze would come later. Also, there were hopes that it could fuel a trip above the $30,000 resistance. As you follow on Kriptokoin.com, BTC price is currently gathering strength in the 29,200 region.
If #bitcoin keeps trending up there is a lot of liquidity between $31k – $35k.https://t.co/sqKr3pvbYP pic.twitter.com/i3DTDKcvu6
— Philip Swift (@PositiveCrypto) May 4, 2023
Matrixport: Bitcoin could reach $36,000
Elsewhere, crypto services provider Matrixport is expecting a 20% increase in Bitcoin price. The analytics firm said in a research report on Thursday that the BTC price could reach the 35,000-36,000 range. According to the report, Bitcoin is trading in a narrowing wedge that is about to break upwards. This pattern technically suggests a range of about 20%.
Matrixport says the Fed’s target for 25 basis points is likely to be the last for this cycle. According to analysts, this may prepare the market for another strong rally.
https://twitter.com/realMatrixport/status/1654020799018446848
Head of research, Markus Thielen, wrote that stock buybacks have resumed following the end of the last earnings season. He also said that this “will continue to be a general headwind for equities and risk assets.”
In the note, he said that Bitcoin trading volumes may have dropped recently, but “the higher path sees only limited resistance.” Transactions on the Bitcoin network have reached ATH levels as the number of active addresses on the Bitcoin network remains strong at close to 1 million addresses.
BTC may not exceed $30,000
Technical analyst Sahana Vibhute said that Bitcoin could test $29,969 in the short term. The analyst is watching the resistances at $28,817 and $29,603.
Conversely, if BTC price dips below $27,637, it will signal a potential downtrend. However, if the RSI dips below 50, the MACD could continue to drop while the volume oscillator remains negative. This will force BTC price back to the $27,910 test.
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