Despite near unanimity in the market prediction for the next action the Fed will take, Bitcoin traders are forecasting sudden price changes for BTC.
On July 26, as the Federal Reserve’s interest rate announcement was approaching, Bitcoin traders braced for the usual volatility.
According to Cointelegraph Markets Pro and TradingView data, the price of one bitcoin has been circling about $29,200.
Although it has rarely moved since the beginning of the week, market participants were fully aware of Bitcoin’s volatility because macro triggers were only hours away.
The Fed rate announcement was the first of these, and it was predicted that, in keeping with tradition, it would cause chaotic, if unreliable, short-term BTC price movements.
The Fed Chair’s statement and subsequent remarks on it were of interest on that day.
Popular trader Jelle recently shared his newest analysis with his Twitter followers, saying that the market has already factored in a 25 bps rate increase and currently believes this will be the last rate hike for some time.
“What JPow says after the initial rate hike announcement is what makes the event intriguing, in my opinion.”
Jelle was referring to the nearly universal belief that the Fed will raise interest rates by 25 basis points. At the time of writing, those odds were 98.9% according to CME Group’s FedWatch Tool, with only a 1.1% possibility of a 50-basis-point increase.
By examining the order book composition on Binance, the biggest cryptocurrency exchange in the world, on-chain monitoring resource Material Indicators discovered that one or more parties were getting ready for BTC’s price to see new losses in response to the Fed.
Liquidity for a $16 million “plunge protection” bet was slightly under $28,000 for the day.
“Let the games begin,” it summed up a portion of the Twitter comment.
Beyond Bitcoin, the strength of the US dollar also appeared to be trending indecisively in front of the Fed.
The U.S. Dollar Index (DXY), which is now seeing a minor recovery after falling to its lowest level in more than a year, trended downward once more on the day and was getting close to 101.
DXY continues to be of interest to some Bitcoin traders who are looking at historical trends because it has historically shown an inverse correlation with risk assets and Bitcoin.
Popular trader Moustache, who this week disclosed a replica Bitcoin/DXY scenario emulating prior Bitcoin bull runs, is one of them.
He claimed that it was only a matter of time before Bitcoin broke out.