Bitcoin price returns to a key support level as worries about a Fed rate hike capture $27K

Bitcoin bears are unable to halt further losses as the BTC price gives up its earlier gains and opportunistic whales manipulate the market with an abundance of liquidity.

On May 19th, the price of bitcoin fell again below $27,000 after reports of high trading volumes weighed on the cryptocurrency’s value.

After a brief collapse, the pair staged a minor comeback, returning to its earlier trading range just before the Friday morning opening on Wall Street.

Overnight losses were caused by rising speculation that the Federal Reserve of the United States would raise interest rates in June.

The week’s low unemployment claims statistics were a contributing factor, as was the hawkish tone from Fed officials.

At the 2023 International Insurance Forum in Washington, DC, board member Philip Jefferson said, “On the one hand, inflation is too high and we have not yet made sufficient progress on reducing it.”

Demand has started to feel the consequences of interest rates that are 5% higher than they were a little over a year ago, despite the fact that the effect has been subdued in the labour market so far.

The probability that the Federal Reserve would pause its rising cycle next month has fluctuated between 95% and 62% on the FedWatch Tool maintained by CME Group.

Material Indicators, a monitoring service, provided a timeline of the events that revealed the owners of the bid and ask liquidity engaging in transactions to influence the short-term price of bitcoin.

As the price dropped, “a ladder of bids was rugged,” and the price fell to its previous support level of about $26.5k, but a sell wall was rapidly set up to keep the price from falling any further.

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