What does Wall Street think Bitcoin will do in May 2023?

When it comes to investing, there are only a few clear winners for the first four months of 2024. Chipmaker Nvidia (up 90% year-to-date) and social media platform Meta (up 92% year-to-date) are the clear winners of the most famous names on the tech exchange Nasdaq. Tesla stock has also, if you count from 1 January till now, shown a nice uptrend.

Bitcoin (up 80% since the beginning of the year) is the most famous in the world of crypto. Ethereum isn’t doing too bad either.

A growing correlation between tech and crypto again or is it too early to draw that conclusion? What can we expect in the coming weeks and months? According to CNBC analyst Katie Stockton, there is bad news for both tech and Bitcoin in the short term and good news in the medium to long term. Let’s explain.

Always the Fed

Next week we will receive the important interest rate decision from the US (on Wednesday 3 May) and therefore many analysts think that we can first expect a short pullback (about half of Wall Street thinks we’re due a last rate hike) before we go higher again (due to good economic results in the medium term). This will also be the case for Bitcoin, at least according to Katie Stockton, founder of analyst firm Fairlead Strategies.

Major averages are coming off their worst day in more than a month, but @StocktonKatie thinks a deeper pullback could be in store as corporate earnings roll on. She explains why: pic.twitter.com/MCXkWvg2w3

— Squawk Box (@SquawkCNBC) April 26, 2023

The psychologically important $30,000 level looks set to be a difficult point for Bitcoin, she believes, and if the Fed is indeed negative on the outlook for the US economy this week, Katie expects a return to (at worst) to the technical support level of $25,200, which is below the 50-day moving average of $27,000, where Bitcoin may also find support.

Short-term oversold conditions should generate a brief pause before bitcoin resumes lower toward key support… the weekly stochastics have a downturn, which, if confirmed at the end of the week would support a more prolonged pullback.

Said Katie

However, if Bitcoin can finally break through the $30,000 mark, then the way is open for a possible growth to the next ceiling, which is currently around $35,900.

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