Bitcoin trader keeps $40.8K BTC price target amid warning over risk asset 'pain trade'
Bitcoin (BTC) consolidated below $40,000 on May 5 after U.S. economic policy excitement saw a spike to one-week highs.
Data from Cointelegraph Markets Pro and TradingView confirmed an overnight peak of $40,050 on Bitstamp following comments from the Federal Reserve and Chair Jerome Powell.
The U.S. central bank had conformed to market expectations with a 0.5% key rate hike, also suggesting that similar repeat hikes would follow.
With that, a modest market rally left Bitcoin eerily lacking volatility in what was a strong contrast to previous Fed pronouncements on topics such as inflation.
While many expected risk assets en masse — including crypto — to deflate under the new policy, not everyone believed that such a scenario would cause investors maximum discomfort.
"With so many people calling for melt ups and melt downs, maybe the pain trade is to chop sideways in risk assets for a long time," economist Lyn Alden argued.
Bitcoin circles likewise were not expecting major trend changes. Ben Lilly, a token economist at Jarvis Labs, highlighted low funding rates on BTC derivatives markets.
"Market saw some relief with Powell's comments. But will it continue for the crypto market? To start, funding rates have been negative for a long period of time. This tends to happen at range lows," he wrote in a series of tweets.
Lilly added, however, that a lack of accumulation from whales at current price levels was "not what we hoped to see."
Focusing on lower timeframes, popular trader Crypto Ed held out for a fresh push above the $40,000 mark on May 5.
Related: Bitcoin pushes to $40K, but are bulls strong enough to win Friday’s $735M options expiry?
For him, BTC/USD was in line to hit $40,800, and while there were "plenty of reasons" to
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