Bitcoin tumbled and dipped slightly below the $30k psychological level after touching $31k on Friday. Ethereum’s Shanghai upgrade on Wednesday was a success and the price only suffered a mild selling pressure, which later helped to spread a sense of security amongst market participants and pushed up the price above $2.1k. However, Friday’s U.S. stock market showed unstable movements as stronger-than-expected consumer sentiment and Fed’s Waller’s speech strengthened the possibility of another rate hike in May.
Bitcoin defended $30k on Friday, but with important events and economic data behind, the coin could be subject to some selling pressure this week as market participants may want to secure their profit from last week’s rally. Nevertheless, the Fed Funds futures market has already priced in more than 80% chance of a 25bp hike in May, so pressures from macro factors on the price of bitcoin is expected to be limited. Furthermore, while bitcoin’s relative strength index (RSI) fluctuated above the 70% threshold a couple of times last week, which signals overboughtness, its overall technical outlook still looks strong, so its potential downside should not be severe. All in all, a little bit of correction should be expected and it will ultimately be healthy for bitcoin’s upward trend to continue.