Possible short-term Bitcoin rally

Source: AdobeStock / ironstuffy

Bitcoin (BTC) and wider crypto market they entered gathering Recovery in the last day, after an expected rate increase of 0.5 percentage points in United State And the “optimistic” perspective of the president Federal Reserve (feed it) Jerome Powell. According to one analyst, a significant drop in the cryptocurrency market could form now, while others said the recovery rally could be short-lived.

Although broader than previous rate increases, the Fed’s move on Wednesday to raise interest rates by 50 basis points was widely expected by the market. The uncertainty has instead focused on what the Fed will say about future increases, with some fearing a 75 basis point hike at the Fed’s next meeting.

to me Marcos SoteroThe comfort rally seen in Bitcoin and other cryptocurrencies after Wednesday’s rate hike in the US came as “expected,” an analyst at digital asset broker GlobalBlock.

Sotero said he writes in an email comment on Thursday

The market had “clearly seen this bearish event in the weeks leading up to the FOMC meeting.” [Federal Open Market Committee] […]”.

He added that President Powell sounded “optimistic” at the press conference with his comments about a possible rise in inflation in March.

Soterio said Powell took the opportunity to dismiss the idea of ​​a scary 75 basis point hike at the upcoming Federal Reserve meeting, arguing that this would likely “allow the crypto market to recover in the short term.”

Minimum Possible Importance for Bitcoin

Meanwhile, according to Mike McGlone, chief commodity strategist at Bloomberg Intelligence, the current market environment with lower volatility for cryptocurrency and bitcoin compared to many traditional markets is evidence of adoption and that institutional participation in cryptocurrencies is “taking on momentum.”

In his recent perspective on the cryptocurrency market, McGlone also said that the fact that BTC fell only 15% in 2022, compared to 20% in the Nasdaq 100 index, shows that cryptocurrencies can be considered a risk-free asset. It would be a big change from the current situation, where cryptocurrencies are generally viewed as a risky asset.

Additionally, McGlone highlighted fed fund futures as an indicator that had previously predicted significant drops in the price of bitcoin. If previous patterns were to repeat, McGlone wrote, the catalyst would be a drop in stock prices, adding that in 2022, parallels can be seen between bitcoin’s relative strength versus the stock market.

McGlone says Bitcoin could hit a low with Fed rate hike expectations:

Bitcoin
Source: Bloomberg Intelligence

Additionally, McGlone, better known as the crypto Bull, said that choosing not to invest in Bitcoin presents a risk to investors and that this risk “may outweigh the potential failure of the technology/asset.”

“We see greater potential for Bitcoin to continue doing what it has done for most of its existence: outperforming most traditional asset classes,” the strategist wrote.

Worst April in Bitcoin History

Meanwhile, according to a new report from the cryptocurrency exchange legendary sea monsterApril ended up being the worst April in bitcoin history, with a return of -18%.

“This comes as a surprise, as April is generally a good month for BTC performance,” the report said.

He added that so far in 2022, bitcoin has performed below its historical monthly returns every month, with the exception of March.

Finally, cryptocurrency researcher Babel Finance wrote in his latest weekly market report that BTC reserves on exchanges continue to decline, hitting a four-year low last week. The company wrote that this indicates that institutional investors are still holding their bitcoins, despite the recent price drop.

According to the report, on-chain data shows that the volume of transactions on the Bitcoin network has increased since mid-March, peaking at $27.28 billion on April 28.

The company wrote that with transactions in excess of $10 million, which now accounts for more than 40% of daily volume, remittances from professional traders, including corporations, counterparties, trustees, and high net worth individuals “are gradually beginning to take hold. on retail users.

Bitcoin price

On Thursday at 12:46 UTC, Bitcoin settled at $39554. The coin is up 1.5% for the last day and 0.8% for the week, and is down 15.1% for the month.

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