Since its halving event on April 20, 2024, Bitcoin (BTC) has been sliding and pulling the entire crypto market down with it. On April 30, Bitcoin was lingering near the $57,000 mark into FOMC. But, many now wonder whether that is the last the marker will see when it comes to Bitcoin dropping lower.
Bitcoin has been dropping toward the two-month lows as April was ending and risk assets appeared to brace themselves for the next United States macro move.
Bitcoin Volatility Cools Into FOMC
Market data acquired from TradingView followed skittish BTC price action for several hours after new lows of $56,500 on Bitstamp. The traders remained on edge across risk assets ahead of the Federal Reserve’s next interest rates announcement and the subsequent press conference from chair Jerome Powell.
After the Quarterly Refunding Announcement, or QRA, dealt a massive blow to the United States liquidity outlook, market participants hoped that Powell’s tone after the Federal Open Market Committee (FOMC) meeting would not sound excessively hawkish.
The founder and CEO of risk management firm 42 Macro, Darius Dale, wrote in a section of a digest published on X (formerly Twitter):
“The FOMC statement and Powell presser this afternoon are likely to confirm USD money market pricing of a much more tepid policy normalization cycle.”
As much as Chair Powell would want to play up ‘two-sided risks to the economic outlook’, the reality of this matter is that the preponderance of evidence supports the ‘no landing’ scenario being the highest and potential outcome. On that note, ‘higher for longer’ might have been the dominant message on the day.
The most recent data from CME Group’s FedWatch Tool highlighted the lackluster expectations for good news, with the odds of the Fed holding rates at their current levels at 99%. Striking a highly optimistic tone, popular trader CrypNuevo insisted that the worst Bitcoin and altcoin losses were probably complete.
He told X subscribers that Bitcoin dropped hard and that reinforced the idea that whatever Jerome Powell had to say this week, it might have already been priced in. However, investors are wondering whether Bitcoin will sink towards the $50,000 level.
Interestingly, in the latest edition of its London & New York Daily Color market updates that were sent to Telegram channel subscribers, in the meantime, trading company QCP Capital referenced both the QRA and Powell as possibly holding surprises for risk-on sentiment. It stated:
“There are two important events happening today that could either exacerbate this bearish move or reverse it. Firstly, if Powell is dovish at FOMC, it could provide a bullish flip. Secondly, if the QRA (Quarterly Refunding Announcement) sees heavy issuances in US bills (front-end) instead of the 10-year (back-end) it would reduce fears of longer-term rates spiking and might put some brakes on the USD rally.”
Bitcoin Price In ‘Typical’ Bull Market Retrace
Bitcoin traders therefore focused on important Bitcoin price levels to watch after many lines in the sand continuously fell through.
Rekt Capital revealed on the day:
“This current Bitcoin retrace is slowly turning into an almost 50-day retrace,”
An accompanying chart that compared Bitcoin price pullbacks in the whole bull market that started in early 2023.
Rekt Capital described the latest drop in Bitcoin’s market, coming in at around 20% as typical” within this context. He noted:
“Typical retraces have been 2-3 weeks, longer ones up to 2 months.”
Meanwhile, the co-founder of trading suite DecenTrader, Filbfilb highlighted a potential Bitcoin renaissance coming in the footsteps of gold in recent years. He published on an X thread while comparing these two assets:
“I think we can go lower than on that chart, but if it’s bullish over the next months it might happen like this as a general idea.”
For now, it seems like investors and analysts are waiting for Bitcoin to rise in the coming months.
