Investors around the world were eagerly awaiting the outcome of the Federal Open Market Committee meeting on May 4. In the end, the result is in line with expectations. There will be a 0.5% hike in interest rates and the central bank plans to reduce its balance sheet from June. It is now difficult to predict how the market will react to this.
Billionaire investor Paul Tudor Jones said in an interview with CNBC that the United States is entering “uncharted territory” as interest rates rise while the financial conditions index tightens. Tudor Jones warned that the situation for stocks and bonds would be “very, very negative”. He added that the current environment is the worst on record for financial assets.
Due to the uncertainty, some investors have reduced their investments in crypto. This led to a weekly outflow of $132.7 million from Bitcoin-related funds (BTC) last week, the largest since June last year, according to a report from CoinShares.
Will Bitcoin and Altcoins capitulate or will investors buy after the Fed’s decision? Let’s look at charts and key levels.
The bulls have been defending the bullish channel support line for the past four days. It is a positive sign. If the buyers raise the price above the 20-day EMA at $39,553, it would signal that the bears are giving way.
BTC/USDT might then rally to the 50-day SMA at $41,922. This level might provide resistance, however, if the bulls overcome this hurdle, the pair might continue higher towards the 200-day SMA at $46.924.
However, if the price declines from the 20-day EMA or the 50-day SMA, this will indicate that the bears will continue to sell on the rallies. The pair could then fall back to the support of the channel.
A breakout and close below the channel could lead to another decline to $34,300 and then to $32,917.
Ether (ETH) attempted to break above the 20-day EMA at $2,920 on May 2, but failed. On the positive side, the bulls didn’t allow too much of a downside and are now trying to break through the resistance again.
If the buyers allow the price to move above the 20-day EMA, ETH/USDT could rally to the 50-day SMA at $3,069. Bulls must hold the price above this level to signal a short-term trend change. The pair could then move the 200-day SMA to $3,441. A break and close above this level could signal the start of a new uptrend.
However, if the price is falling from the 20-day EMA, it will indicate that the bears will not easily give up their advantage. It also increases the likelihood that the price will fall below the uptrend line. If that happens, the pair could fall to $2,450.
Cardano (ADA) has been very close to a critical level of $0.74 for the past few days, but the bears failed to break the support. This signals that the bulls have been aggressively defending support.
ADA/USDT may now rally to the 20-day EMA at $0.86 where the bears may once again offer strong resistance. If the price declines from the 20-day EMA, the sellers will again try to drive the pair down below $0.74. If they succeed, the pair could slide further to $0.68.
However, if the bulls can move above the 20-day EMA, the pair could rally at the $1 resistance. A breakout and close above this level would signal that the bulls have regained control.
In this context: Ethereum (ETH) on the verge of surpassing $3,000: ETH outflows hit an all-time high on Coinbase
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and every transaction involves risk. Research well before making a decision.
Market data comes from the crypto exchange HitBTC.
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