Bitcoin (BTC) has been volatile so far on May 4, with all eyes on today’s Federal Reserve decision, which is only hours away.
Only the past gives hope
As data from Cointelegraph Markets Pro and TradingView shows, BTC/USD is floating between the next level of resistance and support on Wednesday after trading at just $37,600 the previous evening.
A subsequent rally has now catapulted the market-leading cryptocurrency to $39,000, up 4.1%.
Nonetheless, Bitcoin as a whole remains trapped within the existing price range and left to macro forces, which may soon make themselves felt most clearly in the form of the US Federal Reserve.
For example, the Federal Reserve and its Federal Open Markets Committee (FOMC) are holding a two-day meeting today, May 4, where the focus is on whether the next interest rate hike will take place and how big it will be.
With rather tense sentiment in light of this, some pundits are turning to historical comparisons to encourage investors. A significant rise in interest rates in 2015 caused BTC to turn around, which ultimately led to the record run of 2017.
— Gert van Lagen (@GertvanLagen) May 3, 2022
“BTC is currently testing multi-week resistance,” as crypto analyst Rekt Capital notes for the short time after Bitcoin surged above $39,000 climb is. To which he adds:
“If we break this resistance, the multi-week downtrend will be over and BTC will be back.”
MicroStrategy wants to prevent Bitcoin from crashing
Meanwhile, other experts are warning of a “capitulation” that could trigger a bottom or crash in BTC/USD. The industry already seems to be preparing for this eventuality, which gives this negative forecast all the more weight.
MicroStrategy, the company with the largest Bitcoin reserves of all, wants to buy more in such a worst-case scenario to avoid a total BTC crash.
Phong Le, the software maker’s chief financial officer, explained how far Bitcoin would have to slide for the company to make the so-called margin call during the presentation of MicroStrategy’s quarterly report for the first quarter.
“Basically, Bitcoin would need to go down to $21,000 for us to have a margin call,” Le said. And further:
“However, before we see such a 50% crash, we would buy more bitcoin so it never goes that far down. We don’t want to get into this mess in the first place.”
Apparently, MicroStrategy is committed to supporting the Bitcoin price in the event of a capitulation. Experts agree that such a crash would send the crypto market leader as low as $25,000 to $30,000.
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