Crypto markets traded higher yesterday after the US Federal Reserve hiked its benchmark interest rate again by 25 basis points in a bid to cool inflation. Bitcoin (BTC) is up 2.44% to $29,152, while Ethereum (ETH) broke $1,900. The Fed said it has indicated that this week’s rate hike could be its last for now. Investors and traders are keeping a close eye on the next US jobs numbers due to be released on Friday. The global crypto market cap traded at around $1.20 trillion, up 2% in the past 24 hours. The total volume in DeFi is currently 3.45 billion, 8.04% of the crypto market’s total 24-hour volume. The volume of all stablecoins was $38.99 billion, which is 90.76% of the total 24-hour crypto market volume.
Bitcoin is up 70% year-to-date, but market liquidity for the world’s leading crypto is drying up. This means smaller trades can always move Bitcoin prices more. For example, a purchase of 462 bitcoins ($13 million) late last month managed to increase the price by 1% from more than 1,400 bitcoins ($23 million) in January, according to CCData. And while the bitcoin price has rallied, particularly as the banking turmoil fueled renewed confidence in the asset, it has stalled lately. For the past few weeks, Bitcoin has been hovering in the $28,000 to $29,000 range. According to data from CoinShares, this coincided with outflows of $72 million in digital asset investments over the past two weeks, following six straight weeks of inflows. It is better to wait for the price to complete the breakout before placing new bets as the symmetrical triangle setup sometimes behaves like a reversal pattern. The flat 20-day EMA ($28,642) and the RSI near the middle do not give any clear advantage to either the bulls or the bears.
Ether’s (ETH) price has shown weakness after failing to break above the $1950 resistance on April 26th. The ensuing correction took ETH to $1,810 on May 1st, nearing its lowest level in four weeks. Interestingly, the move occurred while First Republic Bank (FRB) was being seized by the California Department of Financial Protection and Innovation. Popular with whales and arbitrage desks, quarterly ether futures typically trade at a slight premium in spot markets, suggesting sellers are asking for more money to delay settlement for a longer period of time. Since April 19, ether futures premium has been stagnating near 2%, suggesting professional traders are not ready to go neutral, although ETH price tested the $1950 resistance on April 26. The proportion of Ether held by so-called whale addresses has declined since Ethereum’s Shapella update in mid-April, suggesting that large investors may relent in the near term. The $2,000 level is a key psychological resistance level for ETH/USD, which the bulls failed to break despite multiple attempts in 2023.
On the macro front, BTC/USD lost ground as the S&P 500 lost 0.7%. The decline in risky assets was accompanied by further mayhem for US regional bank stocks, with PacWest Bancorp again taking the lead, falling more than 50% on the day. For the first time in weeks, the stock markets are reacting to the banking crisis. It is argued that the Federal Reserve’s latest rate hike, which was confirmed at 0.25% on May 3, added fuel to the fire. The recent crypto sideways trend suggests that investors are reluctant to place further bets until there is more clarity on whether the US Treasury will continue to inject liquidity to contain the banking crisis, support inflation and provide positive momentum for tight assets.
Technical Outlook
Bitcoin:
BITCOIN made a ‘Hammer’ candle at the low of $19,549 and witnessed a sharp rally to $31,000. Post this move, the asset saw some profit booking and the prices dropped to $26,942. Currently, on a daily time frame, BTC is taking support at its 50-Day Moving Average and trading sideways in a ‘Symmetrical Triangle’ pattern with low volumes indicating indecision in trend. Breakouts on either side of the triangle will further decide the trend for the asset. $32,500 will be a major hurdle for the bulls whereas $25,000 will act as a strong support for the asset.
ETH:
ETH witnessed a sharp rally and surged almost by 56% from the recent bottom of $1,370 to the high of $2,146.5. Post this move, it started consolidating at the highs and traded sideways making small ‘Spinning Top’ candles that indicated indecision in trend. The bulls failed to manage the grip on the asset as it saw some profit booking and the prices dropped to $1,787. Currently, on the daily time frame, ETH is consolidating and trading sideways around its 50-Day Moving Average. The asset has a strong support of around $1,700 – $1,725 (Horizontal Line & 38.2 Fibonacci Retracement Level) whereas $2,000 will act as a strong resistance.
BNB:
BNB after making a high of $350 made a ‘Tweezer Top’ Candle that witnessed a profit booking and the prices plunged to $315. The asset too took support at its 50-Day Moving Average and moved upwards up to $345. However, the bulls were not able to break the recent high of $350 (Tweezer Top pattern). Hence to further rally, BNB needs to break and close above $350 whereas a break below $300 will lead to further downfall.
Monthly Snapshot
| March | April | Last Month | Current Month | ||||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $28,478 | $29,268 | 2.77% | $29,160 | $19,628 | $31,005 | $27,071 |
| ETH | $1,822 | $1,876 | 2.96% | $1,854 | $1,378 | $1,938 | $1,809 |
| BNB | $317.04 | $337.65 | 6.50% | $346.45 | $265.71 | $319.59 | $339.39 |
| crypto | 1m – % Vol. Change (Global) |
| BitCoin (BTC) | -40.42% |
| Ethereum (ETH) | -5.97% |
| Binance Coin (BNB) | 16.28% |
| Resistance 2 | $37,500 | $2,450 | $1.30 | $380 |
|---|---|---|---|---|
| Resistance 1 | $32,500 | $2,250 | $1.05 | $350 |
| USD | BTC | ETH | Matic | BNB |
| Support 1 | $27,500 | $1,850 | $0.95 | $300 |
| Support 2 | $25,000 | $1,700 | $0.75 | $255 |
Market Updates
- Decentralised finance (DeFi) protocol Curve Finance has launched its native algorithmic United States dollar-pegged stablecoin on Ethereum mainnet — minting more than $22 million worth of the crvUSD token so far.
- Crypto exchange Coinbase is stopping the issuance of new loans through its Borrow service, a product that allows certain United States customers to post crypto as collateral to receive a cash loan.
- Terraform Labs is seeking to have a class action lawsuit against the firm dismissed, arguing the United States securities laws referenced are not applicable to its foreign-developed protocols.
- Greg Gianforte, the governor of Montana, has signed into law a bill largely preventing local governments in the state from passing laws prohibiting crypto mining.
