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Bitcoin price struggled in the first few months of 2022 as central bank monetary tightening tightens assets across the board. The Fed is widely expected to raise rates by 50 basis points – the biggest rate increase in 22 years – to curb rising inflation.
Now, a veteran trader has warned that the price of bitcoin could drop as low as $28,000, down $10,000 per bitcoin from the current price – despite historical data suggesting that May could be a strong month for bitcoin.
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“Completing a bearish channel typically results in a decline equal to the width of the channel, or in this case a hard test of $32,000 or more – my guess is $28,000,” Peter Brandt, chief executive of the service trading factor, published to Twitter next to a graph showing the downward trend in the price of bitcoin.
While bitcoin, cryptocurrencies and equity markets are on high alert ahead of the Fed’s interest rate decision, traders are even more attentive to comments from Fed Chairman Jerome Powell, who will speak at a press conference following the release of the statement. at 2 pm ET.
“Fed meetings always signal uncertainty and volatility, which can affect not just digital assets but broad markets as a whole,” said Eric Chen, chief executive of decentralized exchange protocol injector developer Injective Labs, in comments by email.
“But cryptocurrency markets are more tied to the underlying technology and value behind the projects and larger market trends over time have only proved that fact.”
Looking at recent trends, the month of May has historically been the fourth-best month for bitcoin, analysis of coindesk showed, with the price of bitcoin making gains in seven of the last 11 years.
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“In terms of seasonality, May is considered a relative success for BTC. Over the past 11 years, bitcoin ended the month up seven times and down four times,” said Alex Kuptsikevich, senior market analyst at FxPro, in comments by e -mail.
Bitcoin price has found a floor in recent weeks, repeatedly hitting support at around $38,000 as positive bitcoin and cryptocurrency developments come in.
The Central African Republic has followed El Salvador in adopting bitcoin as a legal tender, while Panama has signaled that it is increasingly interested in cryptocurrencies. Wall Street giant Goldman Sachs last week offered its first bitcoin-backed loan line, dubbed a “significant step” by Bloomberg.
“I still believe that cryptocurrency is the best hedge against these macroeconomic issues, which is why institutional interest in the sector has only continued to grow,” added Chen. “Both VC funding and cryptocurrency fund deployments are rising at one of the fastest levels since bitcoin’s inception.”