Bitcoin price retests key support as Fed rate hike fears steal $27K

Source: CME GroupIn a detailed breakdown of the occasions, monitoring resource Material Indicators showed owners of quote and ask liquidity putting trades to control BTC price behavior on brief timeframes.” As price began to drop, a ladder of bids was rugged and cost moved to prior support ~$ 26.5 k, however a sell wall was quickly put to reduce price. Source: TradingViewMaterial Indicators referenced the May 19 look by Fed Chair Jerome Powell, with the implication that further hawkish language on inflation would add to run the risk of asset rate pressure.Traders in “wait and see” modeTraders hence preserved possible bearish targets, these focusing on a broad area around $25,000. Source: Crypto Tony/ TwitterTrading suite Decentrader meanwhile flagged uninspiring numbers when it came to shorts versus longs, arguing that a shift was required for rate to have a shot at recovering greater levels.

Bitcoin (BTC) traded back below $27,000 on May 19 as analysis flagged large-volume trades pushing price.BTC/ USD 1-day candle chart on Bitstamp. Source: TradingViewInflation specter haunts crypto marketsData from Cointelegraph Markets Pro and TradingView revealed BTC/USD hitting lows of $26,380 on Bitstamp.A modest recovery then took the set to a range familiar from numerous days prior, this still in focus prior to the weeks final Wall Street open.Downside overnight came courtesy of increasing market expectations of a rates of interest hike by the United States Federal Reserve in June.These came thanks to low jobless claims information for the week, with Fed authorities including a hawkish tone.” On the one hand, inflation is expensive, and we have not yet made adequate development on lowering it,” a speech by board member Philip Jefferson at the 2023 International Insurance Forum in Washington, D.C., mentioned. “On the other hand, GDP has actually slowed significantly this year, and despite the fact that the effect has been silenced in the labor market up until now, need clearly has actually begun to feel the effects of rate of interest that are 5 percentage points greater than they were a little over a year ago.” According to CME Groups FedWatch Tool, the odds of the Fed pausing its hiking cycle next month, at one point over 95%, stood at simply 62% on the day.Fed target rate likelihoods chart. Source: CME GroupIn an in-depth breakdown of the occasions, keeping an eye on resource Material Indicators showed owners of bid and ask liquidity positioning trades to control BTC rate habits on brief timeframes.” After slicing sideways, markets began to price in capacity for another rate hike as the mornings Jobless Report and #FED speakers set the tone for that conversation ahead of #JPows appearance, arranged for Friday,” part of Twitter commentary summarized.” As rate started to drop, a ladder of quotes was rugged and cost relocated to prior support ~$ 26.5 k, however a sell wall was quickly placed to suppress cost.” BTC/USD order book information (Binance). Source: Material Indicators/ TwitterMaterial Indicators noted that BTC/USD performed a retest of the 100-day moving average (MA)– its third in the past 7 days.” After about 90 mins and a few nibbles at the sell wall, the roofing system was pulled. Quickly after that a brand-new $36M block of bids was put below local support and the melt up started,” it added.In addition to the 100-day MA, the 200-week MA at $26,100, the analysis concluded, could likewise form a drawback assistance zone next.BTC/ USD 1-hour candle chart (Bitstamp) with 100-day, 200-week MA. Source: TradingViewMaterial Indicators referenced the May 19 appearance by Fed Chair Jerome Powell, with the ramification that even more hawkish language on inflation would include to run the risk of property price pressure.Traders in “see and wait” modeTraders hence maintained potential bearish targets, these focusing on a broad area around $25,000. Related: Hyperbitcoinization coming, states Bitcoin OG as wholecoiners hit 1 millionMichaël van de Poppe, founder and CEO of trading firm Eight, was amongst them, determining $27,000 as the crucial support level now absent from the chart.Wanted #Bitcoin to hold above $27,000-27,200. Didnt happen, stopped out on my longs and in the waiting video game now. Recover that range, well attempt once again, or now well be waiting for $26,400 sweep and/or $25,000.– Michaël van de Poppe (@CryptoMichNL) May 18, 2023

No trade in between this tight variety,” popular trader Crypto Tony included in part of Twitter comments.BTC/ USD annotated chart. Source: Crypto Tony/ TwitterTrading suite Decentrader on the other hand flagged uninspiring numbers when it came to longs versus shorts, arguing that a shift was needed for cost to have a shot at reclaiming greater levels. Every financial investment and trading relocation involves threat, and readers ought to conduct their own research study when making a decision.

Other Questions People Ask

What does the Bitcoin price retest of key support indicate amid Fed rate hike fears?

The recent retest of Bitcoin's key support level around $26.5K suggests that traders are reacting to heightened fears regarding potential interest rate hikes by the Federal Reserve. As the price dropped below $27,000, it highlighted the market's sensitivity to economic indicators, particularly those related to inflation and employment. This behavior indicates that traders are in a "wait and see" mode, closely monitoring developments before making significant moves.

How are traders responding to the Bitcoin price retest at $26.5K due to Fed rate hike concerns?

Traders are currently adopting a cautious approach in response to the Bitcoin price retest at $26.5K, influenced by fears of a Federal Reserve rate hike. Many are setting bearish targets around $25,000, reflecting a lack of confidence in a quick recovery above $27,000. The market's reaction to economic data, such as jobless claims, is critical as it shapes expectations for future price movements.

What factors contributed to Bitcoin's price drop below $27K during the Fed rate hike speculation?

The drop in Bitcoin's price below $27K can be attributed to increasing market expectations of a Federal Reserve interest rate hike, driven by low jobless claims data. This economic backdrop has created a sell wall that has suppressed prices, forcing Bitcoin to retest previous support levels. Traders are now focused on whether Bitcoin can maintain its position above critical support zones or if further declines are imminent.

What technical indicators are traders watching for Bitcoin's price recovery after the recent retest?

Traders are closely monitoring key technical indicators such as the 100-day and 200-week moving averages as Bitcoin retests support levels. The 100-day MA has been tested multiple times recently, while the 200-week MA at $26,100 could provide additional downside support. A successful recovery above these levels is crucial for traders looking for signs of bullish momentum amidst ongoing Fed rate hike fears.

What should investors consider when analyzing Bitcoin's price movements in light of Fed rate hike fears?

Investors should consider the broader economic context, particularly how Federal Reserve policies impact market sentiment and Bitcoin's price movements. The current environment of rising interest rates could lead to increased volatility and bearish pressure on Bitcoin. Additionally, monitoring liquidity levels and trading volumes can provide insights into potential price behavior as traders react to economic news and forecasts.