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Bitcoin falls towards $38,000 as stocks exit Fed’s ‘reactionary rally’

Bitcoin (BTC) lost nearly $1,000 in the first hour of trading on Wall Street on May 5 as a brief rally ended in disappointment.

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BTC/USD 1 Hour Candlestick Chart (Bitstamp). Source: TradingView

Nasdaq falls 4% after opening after Fed

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it bounced back to $38,130 almost 24 hours after hitting the weekly high of $40,050 on Bitstamp.

The move came thanks to highly correlated US stock markets, which opened on volatility after releasing their own short-lived earnings following May 4 Federal Reserve comments.

At the time of writing, the S&P 500 is down 3% while the Nasdaq 100 is down 4.1%, all within the first hour of trading.

Traders were largely unfazed by the cross-market price action, and Cointelegraph contributor Michaël van de Poppe focused on Bitcoin, arguing that there was room for a retest of $38,000 without worrying sentiment.

“Bitcoin is looking at an HL that I would rather consider a potential long position in,” he told Twitter followers are related to a higher low or HL that may be printed on the daily chart.

“As long as we stay above $38k, all is looking good for another sequel.”

His peer Cheds, meanwhile, highlighted $37,500 as the level to hold to avoid deeper weakness next.

“If we break $37.5K BTC today, watch out below,” he said warned.

This area had previously marked May’s lows after receiving two retests.

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BTC/USD 4 hour candlestick chart (Bitstamp). Source: TradingView

Purpose Bitcoin ETF Sees Record Daily Inflows

Looking at investor behavior and data provided a refreshing contrast to concerns that bitcoin whales are unwilling to buy at current price levels.

Related: GBTC premium nears 2022 high as SEC calls for Bitcoin ETF approval

Analyzing inflows into the world’s first spot-based Bitcoin exchange-traded fund (ETF), the Purpose Bitcoin ETF, analyst Jan Wuestenfeld written down that a new record was set on May 4th.

On the day, a total of 2,900 BTC had entered the Bitcoin investment vehicle, indicating increasing demand for BTC exposure from institutional investors.

“It might have been Powell’s comment yesterday that they weren’t considering 75bps raises, which caused people to get back in,” Wuestenfeld suggested alongside a chart from on-chain analytics firm Glassnode.

He added that Purpose’s assets under management are just 2,000 BTC away from their all-time high.

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Purpose Bitcoin ETF flowchart. Source: Glassnode

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.