Key Insights:
- According to Michaël van de Poppe on Twitter, BTC is expected to bounce, rather than dip.
- Open interest stayed low despite the BTC price rising from $27,000 to $30,000 in the beginning of the month.
- 54% Of Bitcoin’s supply has remained unchanged for two or more years despite market swings. This shows long-term conviction on the part of Bitcoin’s bulls.
Bitcoin’s (BTC) strength in terms of price in the face of a generally bearish market has been demonstrated in its most recent drop and subsequent rebound.
Last week, BTC price declined to the lower $25,000 mark. While there was an impressive price recovery in the beginning of the month, it could not reap much results for BTC price owing to the larger uncertainty around CEXs.
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This week, however, BTC has declined again. And according to data from CoinMarketCap, the cryptocurrency sat at the $25,813 at press time, suggesting the prospect of more consolidation.
What Should You Expect As The Next FOMC Meeting Looms?
Should you be worried about your investments? First of all, you should know that due to investors reducing their exposure to risk in advance of this week’s FOMC meeting, the global crypto market cap has dropped by more than 1% today, bringing its total over the last 24 hours to about $1.16 trillion.
When the Federal Reserve meets on Tuesday and Wednesday this week, it is anticipated that the committee will announce its tenth consecutive rate hike, boosting its funds rate to between 5% and 5.25%, its highest level since July 2007.
This assumption has resulted in a general decline in cryptocurrency prices, with Bitcoin (BTC) plunging 4.3% in the last day and certain alts, such as ETH, SOL, and DOT, plummeting by 4% or more.
According to an analysis tweet by Michaël van de Poppe on Twitter, Bitcoin is expected to bounce.
According to a chart image shared by the analyst in the tweet, BTC is expected to consolidate for a while around the $28,300 zone but ultimately bounce off and rebound to the $29,300 zone.
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Well, well, well #Bitcoin.
Again we're getting a correction going into FOMC? pic.twitter.com/dg2tRL6Tlm
— Michaël van de Poppe (@CryptoMichNL) May 1, 2023
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What Do On-Chain Indicators Say?
This week’s market volatility was greatly influenced by leverage, as seen by the sharp decline in open interest and the rise in total futures liquidations.
It’s interesting to note that open interest stayed low despite Bitcoin’s price rising from $27,000 to $30,000. This demonstrates that spot trading may have been what caused the bounce.
In the grand scheme of things, however, Glassnode data reveals that the supply of BTC is getting tighter, with 54% of it remaining unchanged for two or more years. Despite market swings, this holding pattern shows long-term conviction on the part of Bitcoin’s bulls.
On-chain data, coupled with the general direction of the market indicates that if there is a dip in Bitcoin after the FOMC meeting, it may not be as severe as that of the previous rate hikes.
Bitcoin In The Charts
Bitcoin’s attempt to break the $30,000 zone was rejected by the $29,800 zone last week.
The cryptocurrency has declined ever since and is facing resistance around the 50-day moving average around $28,100 (purple line below)
According to the chart above, a trendline can be drawn from the cryptocurrency’s highs in November 2022, January and February 2023, as well as the recent low formed by Bitcoin’s recent rejection from $31,000.
From this, we can deduce that if Bitcoin has any chance of escaping a dip after the FOMC meeting this week, it has to stay above this trendline (above $27,600).
A break below this trendline would cause an inevitable drop in Bitcoin to the next support zone of around $25,000.
Overall, the RSI on the daily chart is slightly in bear territory, suggesting that the bears may have a slight upper hand in this scenario.
Overall, the outcome of the upcoming FOMC meeting will determine the direction of Bitcoin for the first week in May.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
