As reported by Kriptokoin.com, the price of the leading cryptocurrency Bitcoin (BTC) has once again fallen below the critical level of 30 thousand dollars. However, experts reiterated their analysis of the leading crypto and announced critical levels for BTC! Here are the details…
Experts explained: “Investors should pay attention to these for Bitcoin price!”
Before the Federal Open Market Committee (FOMC) meeting to be held on May 2-3, 2023, the S&P 500 Index finished the week with an increase of nearly 1 percent for 5 days. On the other hand, after the meeting of the US Federal Reserve, unemployment claims data and unemployment rate will be announced between May 4-5, 2023. Any signs of a dovish outlook towards the June 2023 Fed meeting could keep markets buoyant as the market expects a 25bp rise for the last time in a series of target rate hikes. However, as the central bank’s target of keeping inflation at 2%, the new target interest rate is likely to be 5-5.25%, a bear trap event may occur around the Fed rate decision.
However, investors think that falling inflation and stability in the job market could trigger the Fed to pause on rate hikes when the central bank meets again for the FOMC meeting on June 14, 2023. If the rate hike pause comes into effect, the crypto market could potentially take a bullish position in anticipation of a pivot from the Fed, meaning rate cuts at subsequent meetings.
Experts pointed to the next 45 days for Bitcoin!
As the market awaits a pause in the rate hike at its June 14 meeting, any signs of a dovish stance from Fed Chairman Jerome Powell’s post-FOMC press conference could play a key role in setting the market mood for the next 45 days. However, further volatility in the Consumer Price Index (CPI) and employment data may reduce the likelihood of a pause in rate hikes in the near future. However, recently, experts reported that the Bitcoin price could face resistance at the $31000 level against the current $29,243 price range.
According to the CME FedWatch Tool, 84% of respondents expect the US Fed to decide on a 25 basis point increase at its May 3 meeting. So, based on Powell’s comments, a rate hike along the expected line could possibly trigger a Bitcoin price drop before it can take an upward trajectory. Already Goldman Sachs economists said they do not expect the US Federal Reserve to raise interest rates in June 2023. Therefore, the next 45 days may be bullish for the Bitcoin price in general, with many predicting that BTC will go up to $100,000.
Technical analysis for BTC price has been announced!
Last week, BTC experienced a brief pullback but found strong support around a key moving average. After breaking the $25,000 mark, it’s crucial to watch for pullbacks to assess the remaining buying power. In this example, buyers quickly stepped in at the 50-day SMA, indicating bullish momentum. However, the $30,000-$31,000 range has proven to be a strong resistance zone for Bitcoin price today, indicating the possibility of further consolidation.
However, on-chain data draws attention. The growing divergence between the cost bases of short-term and long-term holders is a historically accurate signal that the worst of the bear market is behind us. The cost base for short-term holders has increased to $24,000, while the cost base for long-term holders has dropped to just under $21,000. This differentiation shows that the cost floor of short-term holders is now acting as support for today’s Bitcoin price.
Although this level has only been tested once during the current recovery phase, it has successfully endured. The decline in the long-term owner cost basis is attributable to organizations that bought Bitcoin cheap after the FTX collapse and now aging to the long-term owner cohort.
Looking at leverages, however, played an important role in this week’s market volatility. Indeed, the sharp decline in open interest and the increase in total futures liquidations clearly demonstrate this.
Interestingly, open interest continued to fall even as the price of Bitcoin rose from $27,000 to $30,000. This shows that the jump may have been caused by spot transactions.
Tightened Supply and Growing Demand
Looking at the big picture, Bitcoin supply continues to shrink and 54% of the supply has been dormant for two or more years. This holding pattern shows long-term faith in the face of market fluctuations.
In addition, new addresses are being created at an almost historic rate, indicating an increased demand for BTC price today.
The combination of tighter supply and increased on-chain demand paves the way for potential price increases in the medium and long term.
Reducing Leverage: Will It Provide a Trend Towards Stability?
On the other hand, the main obstacle for Bitcoin in the short term is leverage-induced volatility. However, the overall trend shows a decrease in market leverage, which can make periods of volatility less effective.
Metrics such as open interest by market cap and the percentage of BTC collateralized futures contracts can help gauge leverage and risk appetite in the market. Both of these metrics are on the downside, pointing to a possible shift towards more stable market conditions.
Looking at Bitcoin’s future predictions, Bitcoin’s resilience to market fluctuations and its ability to recover after short-term pullbacks show its underlying strength. As leverage continues to drop and on-chain demand increases, BTC could prepare for a potential price spike. Investors should closely monitor key metrics and trends to make informed decisions about Bitcoin’s future prospects.
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