Bitcoin May 4, 2022 – The Fed delights the crypto market

Breakthrough in sight? Bitcoin (BTC) has been absorbing losses over the past few days as markets feared a possible $37,000 loss with a possible $35,000 test. Statements by the US Federal Reserve System (Fed) seem to have finally pleased the bulls, not the bears.

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Return $40,000 per bitcoin after indifference to the FED?

Today, May 4, 2022, the price of bitcoin on Bitfinex is hovering around $40,000. At the time of writing, Bitcoin is trading at $39,867 and is currently seeing a solid daily gain of 5.29%.

This sharp rise comes on the day the US Federal Reserve confirms its 1% key rate target by raising the rate by 0.5%.

Although previous statements by the Federal Open Market Committee (FOMC) on the key rate shocked the markets, the latest ones seem to have anticipated the news of the day.

So this anticipation appears to have relieved the dreaded strong downward pressure, while the Committee’s press release gives a rather optimistic view on inflation control:

“With a corresponding tightening of monetary policy, the committee expects inflation to return to its 2% target and the labor market to remain strong.”

Technically, today’s sharp rise in the price of bitcoin gives hope for a return of $40,000 in the coming days. Trader Rekt Capital has shared a chart showing the “RSI breakout” that should precede Bitcoin’s “price breakout”.

Bitcoin price is currently holding above the resistance of the black downward diagonal line in the chart below. Rekt Capital believes that “a daily close above the black diagonal is likely to confirm a breakout” of bitcoin’s price.

Rekt Capital publication – Twitter

The confirmation of this breakout will then be followed by a retest of that black diagonal and then a “movement to the MA of the Pi cycle”, which is around $41,000.

Thus, the markets seem to have avoided for now the strong downward pressure that usually follows the Fed’s statements about measures aimed at curbing inflation. The day of lost support seems to be over now, so bitcoin could be on the verge of rising above $40,000.

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