Bitcoin trader keeps $40.8K BTC price target amid warning over risk asset ‘pain trade’

Bitcoin (BTC) consolidated beneath $40,000 on Might 5 after U.S. financial coverage pleasure noticed a  spike to one-week highs.

BTC/USD 1-hour candle chart (Bitstamp). Supply: TradingView

Fed sparks little crypto response

Information from Cointelegraph Markets Professional and TradingView confirmed an in a single day peak of $40,050 on Bitstamp following feedback from the Federal Reserve and Chair Jerome Powell.

The U.S. central financial institution had conformed to market expectations with a 0.5% key fee hike, additionally suggesting that related repeat hikes would comply with.

With that, a modest market rally left Bitcoin eerily missing volatility in what was a robust distinction to earlier Fed pronouncements on subjects reminiscent of inflation.

Whereas many anticipated threat property en masse — together with crypto — to deflate below the brand new coverage, not everybody believed that such a situation would trigger traders most discomfort.

“With so many individuals calling for soften ups and soften downs, perhaps the ache commerce is to cut sideways in threat property for a very long time,” economist Lyn Alden argued.

Bitcoin circles likewise weren’t anticipating main development adjustments. Ben Lilly, a token economist at Jarvis Labs, highlighted low funding charges on BTC derivatives markets.

“Market noticed some reduction with Powell’s feedback. However will it proceed for the crypto market? To begin, funding charges have been destructive for a protracted time period. This tends to occur at vary lows,” he wrote in a sequence of tweets.

“A very good construction for any upward momentum that begins right here.”

Lilly added, however, that a lack of accumulation from whales at current price levels was “not what we hoped to see.”

“Max pain” for Bitcoin still far away

Focusing on lower timeframes, popular trader Crypto Ed held out for a fresh push above the $40,000 mark on May 5.

Related: Bitcoin pushes to $40K, but are bulls strong enough to win Friday’s $735M options expiry?

For him, BTC/USD was in line to hit $40,800, and whereas there have been “loads of causes” to low cost a extra vital climb, it was nonetheless an choice.

By way of BTC worth capitulation situations, in the meantime, on-chain monitoring useful resource Whalemap repeated its earlier assertion that the realm between $25,000 and $27,000 would represent “max ache” for Bitcoin hodlers.

“A variety of liquidity and cease losses are stacked there,” it explained as a part of Twitter feedback.

BTC/USD annotated chart. Supply: Whalemap/ Twitter

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