Crypto Markets Consolidate as Investors Await Federal Funds Rate Hike Decision

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Last week, the cryptocurrency saw a slight dip of 0.9%, from $1.213 trillion to $1.202 trillion.The consolidation in crypto markets continued with the Us indices also facing a pull back at the end of the week. An upsurge was seen towards the end of the week with multiple earnings being released in the US, but a sudden pullback was seen subsequently due to news around major movements from authorities. All things considered, BTC ended the week in almost same range with major US indices and ETH ending the week on lower levels. Major market movers like Core PCE data and multiple jobs data points will dominate the Federal Funds rate hike decision that’s scheduled for 3rd may.

Caption: Tradingview
bitcoin price analysis

Price Analysis

As we talked about in our last post, Bitcoin fell from $31,000 to $27,812 and touched $27,000. The $28,500 support level was broken, so it will now act as a resistance level going forward.  The bears will try to protect the area between $29,500 and $28,500 and push the price down to $24,719. For the next few days, Bitcoin’s price may range a bit, staying between range highs of $29,150 and range lows of $27,000. 

This shows that bulls and bears have no consensus on which way to trend. As the bears will make an effort to hold on to $29,150, the bulls would buy dips around $27,000. Since the next set of financial data is due, the uncertainty probably won’t last too long.  The BTC/USDT pair could then fall to a key support level between $25,000 and $24,719 if the macro data turns out be bearish for global markets. The bulls ought to defend this level with everything they have. The above bearish scenario will be invalidated if a candle closes above the $30,200 price level.

Bitcoin price

Fundamental Updates

Today, the advance GDP QoQ data is set to release. The data is projected to show a sharp decline from the previous mark of 2.6, coming in at 2.0. While the decline has been ongoing for some time, the current projection is still more significant than previous drops. The consolidation from last week appears to be continuing under current conditions.

The core PCE data is one of the most important and volatile data points for both the Fed and the economy. It’s scheduled to release on April 28th, and the expectation for MoM data is 0.3, just like last time. If the number comes in higher than this, it could have a drastic impact on the markets as it would indicate a reversal of the current cooling-down trend.

In addition to ongoing unemployment claims indicating that layoffs are still happening, a lot of jobs-related data is set to release next week. All of the data being published will be extremely crucial for the federal funds rate hike scheduled for May 3rd. While some participants have shared the view that the Fed should finally put a stop to the rate hikes in light of the banking crisis and multiple other breakdowns, the majority is pointing towards a 25 bps hike at the upcoming rate hike. 

The aftermath of this might not be that severe on the markets, but expectations at upcoming meetings are high. After this hike, the terminal rate projections would be in range, and any further measures would create a severe environment for risk-on assets as well as the economy as a whole.

ppi and cpi data

Bitcoin returns were 0.64% for this week. The Alpha Blue Chip Focused Strategy returns were –4.31% during the same period (20 APR – 27 APR). The Top Cap Digital Assets Strategy and Arbitrage Opportunities and Balanced Strategy returns were -2.9% and –1.46%, respectively.

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