Last week, the cryptocurrency market was majorly stable with a slight dip of 0.25%, from $1.198 trillion to $1.195 trillion. Most indices ended the week with slight changes in percentage terms. BTC, ETH and the broader crypto market continued to face pull back . The Fed’s interest rate hike caused the crypto markets to feel slight dip but this was retraced in just few hours. Post this BTC and ETH ended the week on better levels than the US indices(in percentage terms). The change in commentory from Fed will now lead the major market sentiments for upcoming few weeks along with some macro data releases.
Price Analysis
According to the most recent price movement on the Bitcoin chart, the overhead barrier above $30,000 is being ferociously defended by the bears. The bulls are firmly guarding the resistance turned support level at $27,812 despite the price turning downward and collapsing on May 1. This means that for some time, the BTC/USDT pair may oscillate between $27,812 and $30,200. Typically, a trading range that is tight is followed by a range that is wider. The pair may drop to the critical support level of $24,719 if the price keeps falling and breaks below $27,812.
The pair is more likely to increase to $31,000 and then to $32,500 if the range rises beyond $30,200. A breakthrough over this mark would indicate a gain in momentum. After yesterday’s FOMC meeting, BTC was essentially flat, but it soared in the hours that followed, recovering $29,000
Fundamental Updates
The Federal Funds Rate hike marked in as per the expected 25bps. Whole market had majorly priced this in and hence after a slight dip , the crypto markets retraced. The next major influencing factor here was the press conference after this rate hike. A change in Fed’s commentary was seen after a long time. The initial stance from Fed was to have extensive policy firming, but now the stance has shifted to majorly data dependent monitoring without any affirmation of possible severe actions in the near future. The next major announcement from Fed is scheduled for the 2nd week of June where the summary of economic projections (SEP) will be released which is a big source of information on Fed’s outlook for the near future.
While the Core PCE data is something that the Fed considers closely for it’s decisions, CPI and PPI data are some of the data points that are important too and bring moderate volatility to the markets. The CPI data has been representing a rapid cooldown for a substantial amount of time but the upcoming projection of 0.4 (MoM) is higher than the previous print of 0.1. Apart from few bumps , the Core CPI MoM data has largely been as per the forecast. The next forecast for this is set to be 0.3. Data prints equal to or less that these projections will be extremely bullish for the market indicating a significant cool down is sustained in the market.
In contrast to these, the Core PPI MoM data has shown relatively mixed performance while the PPI MoM data has shown sustainably much better performance than projection. The next print is projected to be at 0.3 mark. Any data equivalent or lesser will be positive for the broader markets.
Bitcoin returns were 0.54% for this week. The Alpha Blue Chip Focused Strategy returns were 4.04% during the same period (27 APR – 4 MAY). The Top Cap Digital Assets Strategy and Arbitrage Opportunities and Balanced Strategy returns were 4.21% and 1.27%, respectively.
