Bitcoin Ignores Fed as Traders Eye Classic BTC Liquidity Hunt

Bitcoin (BTC) remained confined within a narrow trading range through May 20, as cryptocurrency markets shrugged off major United States macroeconomic triggers.

BTC/USD 1-hour candle chart on Bitstamp. Source: TradingView

Powell leaves market with “tons of uncertainty”

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD trading just below $27,000.

The pair experienced brief volatility after Jerome Powell, Chair of the Federal Reserve, provided new commentary on monetary policy and the inflation outlook.

While Powell left the door open for policy adjustments if necessary, his language did not provide clear signals for risk assets. In response, financial commentary resource The Kobeissi Letter warned that “tons of uncertainty” lay 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

Bitcoin soon moved past the event, returning to a range familiar from the preceding weekend.

Assessing the exchange climate, popular trader Skew argued that fresh volatility was only a matter of time.

“Growing variance between perp & spot market; which ive posted about previously,” he summarized in part of his Twitter coverage on the day.

“Very tight illiquid range here between post friday FED speakers. Expecting market to find an EQ early next week in which both spot & perp market will be forced to establish a trend.”

A further post noted that early signals indicated the status quo was about to be disrupted.

$BTC Binance Open Interest
Minimal price movement yet, positions flowing into the market again
Always precedes a liquidity hunt especially in this current environment pic.twitter.com/exvwCTcci6

— Skew Δ (@52kskew) May 20, 2023

Fellow trader Crypto Tony forecast that the range would persist until the start of the new macro trading week.

A close above or below the levels marked on an accompanying 4-hour chart would, he added, provide cause to reconsider the market direction.

$BTC / $USD – Update
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

Others held a bearish view on the immediate future of BTC price performance.

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Popular analytics account IncomeSharks warned that a deeper correction was expected, though it would not materialize for another week.

“Expecting another week of chop before the big sell off,” part of the Twitter commentary stated the day prior.

#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

Trading resource Stockmoney Lizards agreed, predicting an impending breakdown while referencing the “head and shoulders” pattern discussed throughout trading circles in recent weeks.

“Correction in play,” it summarized, offering a target zone around $24,500.

,BTC/USD annotated chart. Source: Stockmoney Lizards/ Twitter

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.