Bitcoin (BTC) saw classic “choppy” price action on May 4 with hours to go before fresh Federal Reserve cues.
Bulls pin hopes on history
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it bounced between support and resistance after hitting $37,600 Tuesday evening.
A subsequent bounceback saw the pair clip $39,000 at the time of writing, providing relief to low-timeframe traders at 4.1% off the lows.
More broadly, however, Bitcoin stayed rangebound and beholden to macro triggers as markets braced for Fed-induced volatility.
The two-day meeting of the Federal Open Markets Committee (FOMC) and press conference was due to begin at 2pm Eastern time Wednesday.
With little to comfort bulls, some turned to historical comparisons. The start of the Fed’s previous cycle of key interest rate hikes in 2015 proved a turning point for BTC price strength, this culminating in the December 2017 blow-off top.
What happened last time the FED came up with a lot of subsequent rate hikes after being zero for a long time?$BTC entered the 2017 bullmarket. pic.twitter.com/lmcIoxXrvN
— Gert van Lagen (@GertvanLagen) May 3, 2022
“BTC is now testing a multi-week resistance,” popular trader and analyst Rekt Capital meanwhile concluded about the daily chart following the uptick above $39,000.
“Break this and the multi-week downtrend is over and $BTC will enjoy upside.”
MicroStrategy plans for BTC to “never get” to $21,000
Elsewhere, amid growing calls for a “capitulation” style event to put in a fresh macro bottom on BTC/USD, contingency plans were also becoming conspicuously more vocal.
Related: ‘More likely’ BTC price will hit $100K before Bitcoin sweeps $30K lows, forecast says
MicroStrategy, the company with the world’s largest Bitcoin corporate treasury, went as far as to say that it would up its Bitcoin buys in such a scenario.
Speaking on its Q1 earnings call, Phong Le, the firm’s president and chief financial officer, also revealed the conditions under which it would receive a margin call on its Bitcoin-collateralized loan.
“As far as where Bitcoin needs to fall, we took out the loan at a 25% LTV, the margin call occurs 50% LTV. So essentially, Bitcoin needs to cut in half or around $21,000 before we’d have a margin call,” he said.
“That said, before it gets to 50%, we could contribute more Bitcoin to the collateral package, so it never gets there, so we don’t ever get into a situation of March call also.”
MicroStrategy thus appeared to state that it would actively support Bitcoin markets during a major capitulation. As Cointelegraph reported, BTC price forecasts currently call for between $25,000 and $30,000 as a worst case scenario.
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