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Tag: fed rate cut

  • Selling Storm: Bitcoin Whales Could Drive Prices Down Further, Experts Warn

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    According to exchange data, inflows to trading venues topped 9,000 Bitcoin on Nov. 21 as prices slid to $80,600 on Coinbase — the weakest showing in seven months.

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    Reports show that about 45% of those deposits came in chunks of 100 BTC or more, and on one day large transfers reached 7,000 BTC.

    The average deposit size in November rose to 1.23 BTC, the largest monthly figure in a year. Those numbers point to more than casual rebalancing; they point to coins being moved where they can be sold.

    Binance Stablecoins Hit Record

    According to market coverage, Binance’s stablecoin holdings climbed to a record $51 billion. At the same time, BTC and Ether inflows to exchanges swelled to roughly $40 billion this week, with Binance and Coinbase leading the move.

    Traders often park funds in dollar-pegged tokens when they want to wait on the sidelines. That build-up means cash is available, but it is sitting idle until sellers either step back or buyers turn up again.

    Analysts Eye Further Pullback

    Some market watchers warn the recent recovery could be only a pause, flagging remaining margin positions and suggested a test of lower levels.

    They said a wick into the $70k–$80k zone would be one way to clear out the last pockets of exposure.

    10x Research put resistance levels at $92,000 and $101,000 as the key ranges to watch during any rebound.

    For context, Bitcoin had clawed back above $90,000 and was trading slightly higher at the time of reporting, but it remains down about 28% from the all-time high north of $126,000 reached in October.

    BTCUSD currently trading at $91,681. Chart: TradingView

    Short-Term Bounce, Not A Full Recovery

    Meanwhile, market moves in stocks and crypto have shown mixed signals. The S&P 500 and the Nasdaq were pushing gains as investors bet on a US Fed rate cut, and that helped risk assets.

    Yet reports from strategists show the usual close link between Bitcoin and the Nasdaq has weakened, with Bitcoin’s decline steeper in recent weeks.

    Ether and many altcoins also faced higher exchange inflows, and several tokens returned to bear-market lows as selling pressure widened.

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    What This Means Next

    Liquidity is present but it is parked in stablecoins, and big holders are still moving assets toward exchanges. A meaningful rally will likely need either heavy buying demand or a clear catalyst that draws those stablecoins back into risk assets.

    For now, the market sits in a waiting mode: a short rally could continue, but a deeper dip remains possible as positions get cleared and sellers complete their rotations.

    Featured image from Unsplash, chart from TradingView

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    Christian Encila

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  • Crypto Watch: Today’s FOMC Is The ‘Most Important Of Your Life’

    Crypto Watch: Today’s FOMC Is The ‘Most Important Of Your Life’

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    For the crypto and broader financial market, FOMC day is upon us once again today. And analysts agree that today’s meeting will be one of the most important in recent years. Kurt S. Altrichter, a financial advisor and founder of Ivory Hill, even describes today’s FOMC meeting as the “most important of your life.” In a new post on X, Altrichter explains why.

    FOMC Preview

    Central to today’s FOMC meeting is the Federal Reserve’s potential indication of a September rate cut. According to Altrichter, the financial markets are almost unanimously anticipating this move, with Fed fund futures indicating a near-certain likelihood of such an outcome. “Market expectation is a strong signal for a September rate cut,” Altrichter points out, marking today’s update as a pivotal moment for financial markets.

    The key question for today is: “How strongly does the Fed signal a September rate cut?” the expert explains. Investors are directed to pay close attention to the FOMC’s statement at 2:00 pm ET, especially the third paragraph, which could subtly signal the Fed’s confidence in reaching its inflation targets.

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    Altrichter advises, “Look at the 3rd paragraph for this key sentence: The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.” Any modification in this wording would be a clear signal that the Fed is nearing its inflation control goals, potentially paving the way for rate adjustments.

    Altrichter outlines several potential outcomes from the meeting, each associated with specific market reactions. In a dovish scenario, the Fed signals a rate cut for September. Then, Altrichter expects a broad market rally, especially in sectors less sensitive to interest rates. “Yields and the dollar should fall modestly with a modest rally in commodities,” Altrichter predicts, suggesting significant movements in standard and sector-specific indexes.

    In a hawkish scenario, there will be no change in the forward guidance by the US central bank. If the Fed maintains its current stance without hinting at future cuts, the markets might experience a downturn. “Look out below and expect a sharp decline. SPX should fall by 1-2%,” he warns, noting that tech and growth sectors might relatively outperform due to their appeal during higher yield periods.

    How Will Bitcoin And Crypto React?

    The potential adjustments in US monetary policy bear direct consequences for the Bitcoin and crypto markets. Crypto, often viewed as alternative investments, reacts sensitively to shifts in monetary policy, particularly regarding interest rates.

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    If the dovish scenario materializes, this could make Bitcoin and cryptocurrencies more appealing. A signal of lower future rates could drive increased investment into the crypto market, potentially leading to price increases as investors seek higher returns in alternative assets.

    Conversely, should the Fed signal reluctance to cut rates, indicating a stronger economic outlook or concerns about inflation, this could strengthen the US dollar and increase yields on traditional financial instruments. Such an environment might lead to a pullback in the crypto markets, as the comparative advantage of Bitcoin and cryptocurrencies diminishes against strengthening traditional yields.

    Max Schwartzman, CEO of Because Bitcoin Inc, commented via X: “FOMC is [today] & its incredibly important as we get into the end of this fed cycle… Here is how the last 11 meetings have gone for Bitcoin…”

    How Bitcoin reacted the last 11 times | Source: X @MaxBecauseBTC

    Thus, today’s FOMC meeting is a watershed moment for financial markets globally, with significant implications for both traditional and crypto markets. As Altrichter succinctly puts it, “A Sept Fed rate cut has driven the 2024 bull market. Tomorrow’s meeting will either reinforce that tailwind or refute it. If the Fed signals a cut, the rally continues. No signal: markets could get ugly.”

    At press time, BTC traded at $66,462.

    Bitcoin price
    BTC bounces off the 20-day EMA, 1-week chart | Source: BTCUSDT on TradingView.com

    Featured image from Shutterstock, chart from TradingView.com

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    Jake Simmons

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