Bitcoin, the world's leading cryptocurrency, experienced a reversal on Tuesday, falling slightly from $30,500 to $29,300. Despite rising more than 10% over the past week, Bitcoin’s upward momentum appears to have come to an end. Looking ahead, traders are wary of any large bids as investors await the release of the Federal Reserve's next meeting in May.​

Markets are pricing in a 91% chance of a 25 basis point rate hike at the Fed's next meeting in May, with traders anticipating a rate cut before the end of the year, according to the CME FedWatch tool.​

Therefore, the announcement of the Fed meeting could have a significant impact on the cryptocurrency market as it is considered a leading indicator.

Strong U.S. economic data could lead to a rate hike in May, impacting crypto markets

The global cryptocurrency market has experienced significant growth in recent months, exceeding an impressive $1.29 trillion. However, the market recently saw a small drop, with the market capitalization falling to $1.25 trillion.

However, the recent decline can be attributed to the release of strong economic data from the United States, which strengthened the belief that the Federal Reserve may raise interest rates in May.

U.S. data on Monday showed confidence among single-family home builders climbed for a fourth straight month in April, while industrial activity in New York state grew for the first time in five months. That in turn fueled speculation the Federal Reserve will raise interest rates in May.

Markets are pricing in a 91% chance of a 25 basis point rate hike at the Fed’s next meeting in May, according to the CME FedWatch tool, and traders are pricing in a rate cut before the end of the year.

Bitcoin Fear and Greed Index at 16-month high, indicating positive sentiment and surging prices

The recent rise in Bitcoin prices has been attributed to a report on the Bitcoin Fear and Greed Index, which showed a 16-month high, indicating high market sentiment. As a result, the price of Bitcoin has risen by more than 7% in the past 30 days, reaching a trading high of $31,000.

Although Bitcoin surpassed the $30,000 mark last week for the first time since June 2022, it has fallen 1.5% in the past 24 hours, falling below $29,491. However, the high greed index suggests that its recent growth, which has pushed its price up by more than 80% this year, may continue.

It is worth noting that investors and traders use the Fear and Greed Index to make informed decisions. Typically, a rise in the Fear and Greed Index indicates that the market is positive about Bitcoin, leading to its current price surge.

Bitcoin Price

Bitcoin’s value recently rose to $31,000, but it fell slightly on the day to $29,300. In contrast, Ethereum has performed exceptionally well, surging more than 10% in the past week and reaching an impressive $2,100 mark.

The decline in Bitcoin price could be related to a bearish breakout of a symmetrical triangle pattern on the 4-hour chart. BTC/USD completed the 50% Fibonacci retracement at $29,450 before bouncing back and not testing the $29,000 level.

Both the RSI and MACD indicators are in the oversold territory, suggesting a possible bullish correction. Therefore, we recommend buying at $29,450.

Ethereum Price

Ethereum is trading at $2,100 with a 24-hour trading volume of $9.2 billion and is up less than 0.50% in recent hours. Ethereum, the second most popular cryptocurrency, is currently experiencing a strong bullish trend as it surpassed the $2,075 resistance level and is currently heading towards $2,150.

If ETH manages to close above $2,150, it could trigger an uptrend with potential highs at $2,250 or $2,300.

On the other hand, if Ethereum fails to close above $2,160, its price could drop to $2,075 or even $2,030. Monitoring the $2,160 level will be crucial to make an informed decision on whether to consider a buy or sell trade today.