Traders are observing favorable conditions for a potential breakout in the Bitcoin price range. However, there are concerns among traders that a significant downward correction may be imminent.
BTC/USD 1-hour candle chart on Bitstamp. Source: TradingView
After Jerome Powell, the Chair of the Federal Reserve, shared new comments on policy and inflation expectations, there was a short period of increased volatility in the pair’s performance.
Although Jerome Powell did not provide clear signals to risk assets in his statements, he did indicate a possibility for future changes if necessary. The Kobeissi Letter, a financial commentary resource, cautioned that there is a significant amount of uncertainty that lies ahead.
SUMMARY OF POWELL SPEECH (5/19/23):
1. Inflation "far above 2% objective"
2. Committed to getting inflation to 2%
3. Unclear if rates are "sufficiently restrictive"
4. Failure to lower inflation prolongs pain
5. Will "take time" to lower inflation
Tons of uncertainty ahead.
— The Kobeissi Letter (@KobeissiLetter) May 19, 2023
Despite the event, Bitcoin quickly moved on and returned to a price range that was already familiar, similar to the range observed during the previous weekend.
Popular trader Skew analyzed the situation on exchanges and predicted that a new wave of volatility would occur in the near future. In a Twitter post, Skew highlighted the increasing differences between the perpetual futures market and the spot market, which he had previously discussed.
“The market has been experiencing a narrow and illiquid trading range since the speeches by the Federal Reserve speakers on Friday. It is anticipated that early next week, the market will reach an equilibrium point where both the spot and perpetual futures markets will be compelled to establish a clear trend”.
Another post highlighted that there were initial indications suggesting a potential disruption to the current status quo.
$BTC Binance Open Interest
Minimal price movement yet, positions flowing into the market againAlways precedes a liquidity hunt especially in this current environment pic.twitter.com/exvwCTcci6
— Skew Δ (@52kskew) May 20, 2023
Crypto Tony, another trader, predicted that the existing trading range would remain unchanged until the beginning of the new macro trading week.
Crypto Tony mentioned that if the price of the asset closes either above or below the levels indicated on the accompanying 4-hour chart, it would provide a reason to reassess the market conditions.
I expect we will be in this range all weekend no doubt, bit we play the breakout if it does come today, tomorrow, next year …
Breakout plays are my favourite. We identify the range, set alerts and wait for the beast to break the cage ‼️ pic.twitter.com/1B7wB5uqCc
— Crypto Tony (@CryptoTony__) May 20, 2023
Caution over “big sell off” for Bitcoin
Some people had a pessimistic outlook on the short-term future of Bitcoin’s price performance
IncomeSharks, a well-known analytics account, cautioned that a more significant price correction was anticipated. However, they predicted that this correction would not occur until another week has passed.
According to a Twitter comment made the day before, it was predicted that there would be another week of turbulent and uncertain market conditions before a significant sell-off occurs.
#Bitcoin – The red squiggles surprisingly accurate so far. Double rejection on the 4h supertrend. Expecting another week of chop before the big sell off. That's when I'll jump back in, when Twitter thinks we are going back to zero pic.twitter.com/hakZMRmdGU
— IncomeSharks (@IncomeSharks) May 19, 2023
Stockmoney Lizards, a trading resource, shared a similar viewpoint, forecasting an upcoming breakdown in the market. They referred to the “head and shoulders” pattern, which has been widely discussed in trading circles over the past few weeks.
Summarizing the situation, Stockmoney Lizards indicated that a correction was currently in progress and suggested a target range of around $24,500 for the market price.
,BTC/USD annotated chart. Source: Stockmoney Lizards/ Twitter
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
