Bitcoin today on May 4th, 2022 successfully holds the support at $37500 with a continued pattern of increased volatility for the next few days.
Bitcoin seems to be stalling just under $40k confirming a roughly 3.38% gain on the daily chart although the asset seems to be moving in a fixed slab between $37500 – and $39500.
But today with a sharp rise of more than 3%, the market seems to be expecting the fed's possibility of hiking the interest rates once again. For if, there is an estimated 50 bps rise in the level of interest rates which is meant to keep inflation in check. (note that 1 bps = 0.01%)
Therefore the fed's funds target to reach 1% after a 0.5% or 50 bps rise in interest rates is a strong reason for the risk assets like bitcoin to increase claiming the idea that the Central Bank's hawkish view is baked in and can't further increase the interest rates, therefore leaving the room of growth for bitcoin and other correlated asset classes.
With momentum technical indicators being flat out showing no significant market and the RSI being neutral, the focus still remains on the trendline connecting the lows of Jan 24th and Feb 24th. A breakdown will result in a continuation of the sell-off and expose the current ascending trendline running through $29,700.
On the higher side, the level to beat for the bulls can be said to be $48,250. The rally could march much higher if the fed softens and delays the expected increase to June at 75 bps.