[Bitcoin Now] Rising Ahead of May FOMC... Concerns Over Decline Remain

[Image source=Yonhap News]

[Asia Economy Reporter Myunghwan Lee] As the U.S. Federal Reserve (Fed) has signaled a big step (a 50 basis point increase in the benchmark interest rate, 1bp=0.01%) at the May Federal Open Market Committee (FOMC) meeting, the price of the leading cryptocurrency Bitcoin is showing an upward trend.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 11:10 a.m. on the 2nd, the price of Bitcoin was $38,578 (approximately 48.85 million KRW), up 1.54% from the previous day.

The cryptocurrency specialized media CoinDesk reported that the Bitcoin price has risen back to the level of the 29th of last month. CoinDesk stated, "Bitcoin price recorded the $38,400 range, up 2.2% from the previous day, but this is the level at the start of the weekend."

However, concerns about price declines continue to emerge. Joe DiPascal, CEO of BitBull Capital, analyzed, "Currently, there is no catalyst to drive the price up, and it may move within the current range or decline. The U.S. stock market is showing weakness, and the U.S. dollar index is rising, factors that continue to pressure Bitcoin." He added, "Although Bitcoin price is maintaining around $38,000, it could fall to the $32,000 to $35,000 range."

Ahead of the Fed's May Federal Open Market Committee (FOMC) meeting, concerns about interest rate hikes are expected to affect investor sentiment. The Fed is expected to decide on a so-called 'big step' of raising the benchmark interest rate by 0.5 percentage points at the FOMC meeting on the 3rd and 4th. Along with this, it is also anticipated to announce a quantitative tightening (QT) plan to reduce the size of its asset holdings.

Meanwhile, the Digital Asset Fear & Greed Index by Dunamu, which operates the domestic cryptocurrency exchange Upbit, recorded 46.47 on the day, indicating a 'neutral' stage. This is an increase of 0.74 compared to 45.72 (neutral) the previous day. Dunamu's Digital Asset Fear & Greed Index is divided into stages of 'Extreme Fear (0?20)', 'Fear (20?40)', 'Neutral (40?60)', 'Greed (60?80)', and 'Extreme Greed (80?100)'. The greed direction indicates increased interest in buying by market participants, whereas moving toward fear indicates a fear of asset decline, leading to market exits and a chain reaction of price drops.