Whales Sell Huge Amounts of Bitcoin Hours Ahead of Fed Decision
BitVerge – Bitcoin (BTC) is at a critical juncture as the market awaits Wednesday’s Federal Open Market Committee (FOMC) meeting . However, expectations for the event are no longer evenly divided, as they were just two days ago.
If the meeting results in a smaller-than-expected rate cut, historical trends suggest that Bitcoin could see a significant correction. If the Fed, led by Jerome Powell, makes a larger rate cut, Bitcoin could be boosted. These on-chain analyses explain why the potential gains in this scenario could be short-lived.
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Whales sell on the news.
Data from Glassnode suggests that Bitcoin whales have started selling ahead of the upcoming FOMC meeting. For example, on September 13, there were 108,163 addresses holding more than $ 1 million in Bitcoin.
Today, the number of those holdings has dropped to 106,104 addresses, reflecting a sale of over 2,059 BTC worth over $2 billion. This “news selling” behavior reflects growing caution among whales, who may be bracing for potential volatility as the market awaits clues on future monetary policy.
For example, Lookonchain reported that one whale sold 500 BTC on Monday, and a day earlier another whale deposited 119 BTC on Binance. These massive sales suggest that whales are taking a defensive stance in anticipation of short-term turbulence before, during, and after the meeting.
According to the US interest rate tracking tool available on Investing Saudi Arabia , the probability of a 50 basis point rate cut is 69%, while the probability of a 25 basis point rate cut is 31%. This tool measures traders’ expectations for US interest rates.
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A potential rate cut could provide an unsustainable boost.
Although the market may be ready for a potential rebound, some analysts believe the after-effect may not be sustainable.
One of those is Marcus Thielen, head of research at 10xResearch. In a report released on September 16, he suggested that a 50 basis point rate cut was the likely outcome of the committee’s meeting. However, the report also noted that Bitcoin may not see the huge rally that many market participants are expecting.
“The Fed should consider a 50bp rate cut, but any action it takes this week may not provide the large boost in liquidity that many are hoping for,” Thielen said. “Historically, Bitcoin’s performance after rate cuts has been mixed; for example, after the 2019 rate cut, Bitcoin’s initial gains were short-lived, with the price falling 30% a few months later.”
Bitcoin Price Prediction: Bears in the Lead
On the daily chart, Bitcoin price is struggling with the 20-day exponential moving average (EMA). It is trading at $58,646, indicating that bulls have no clear path to push the price higher.
Instead, bears continued to exert pressure, limiting Bitcoin’s upward momentum. Bitcoin also remains below the 50-day exponential moving average (EMA in yellow), reinforcing the notion that the short-term trend is bearish.
The Relative Strength Index (RSI) study also suggests a possible correction. As a technical indicator that measures momentum, the current RSI reading, while approaching the neutral dividing line, has not crossed it.
If the situation continues as it is, Bitcoin could drop to $56,224. In a very bearish scenario, the price could reach $52,975 after the FOMC meeting. But if Bitcoin whales return to buying after the event, this prediction could be invalidated.
In this scenario, the price could jump to $64,373 and could pave the way for a Q4 rally, which is what 10x Research expects.
“Even if Bitcoin does rally after the Fed cut, it may not be sustainable, as the comparison to 2019 suggests. With blockchain data currently weak, there is no real activity to drive momentum. While a Q4 rally is likely, its precise timing will be crucial. An unexpected event could spark excitement in the market and restore investor confidence,” the report said.
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