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Assessing BTC’s unusual trajectory in the aftermath of the FED meeting

3min Read

it will be easier for Bitcoin to rally back towards the $30,000 price range. Assuming that all factors are held constant and no other sources of FUD affect investor confidence

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  • Bitcoin’s bullish prospects improve as the FED takes a soft stance on interest rates.
  • BTC unexpectedly dips despite bullish expectations as whales play the market.

Bitcoin experienced a substantial amount of selling pressure in the last few weeks. Most of the selling pressure was associated with concerns about the Federal Reserve possibly increasing interest rates.

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Fast forward to the present and it is now more than 24 hours since the FED made its announcement. The monetary authority revealed that it would maintain its benchmark interest rate between 5.25% and 5.50%. In other words, the rates would remain unchanged, contrary to concerns of a possible interest rate spike.

Technically, the announcement should trigger more confidence among Bitcoin investors as has been the case in the past. This means it will be easier for Bitcoin to rally back towards the $30,000 price range. Assuming that all factors are held constant and no other sources of FUD affect investor confidence.

Unfortunately for the bulls, recent reports suggested that Bitcoin was currently experiencing block congestion. The network had a backlog of almost half a million transactions at the time of writing due to block fullness.

Bitcoin price recap

Despite the FED’s decision not to raise interest rates, Bitcoin’s price performance was overall bearish in the last 24 hours. This was contrary to the bullish expectations and the selling pressure was triggered after the price interacted with the 50-day moving average following a previous upside. It traded at $26,646 at the time of writing.

Bitcoin price action

Source: TradingView

So, why is Bitcoin falling contrary to expectations? This could be a classic incident of whales playing the market. The current bullish expectations will likely entice many retail traders to jump back in. Meanwhile, this would offer an opportunity for whales to push prices lower by selling, so they can then jump back in at lower prices.

How many are 1,10,100 BTCs worth today

Bitcoin addresses with at least 1,000 BTC recently offloaded some of their coins thus contributing to selling pressure. However, addresses holding over 1,000 BTC still held a substantial amount of the coins accumulated in the last few days.

Bitcoin whale activity

Source: Glassnode

Is Bitcoin entering a bear trap?

Bitcoin traders should still exercise caution because the current downside could be temporary. As noted earlier, the favorable interest rate decision could result in more demand in the next few weeks.

Demand will likely resume once the whales are done shaking off the leveraged long traders. However, traders should also consider potential downside risks that could arise in the short term, potentially triggering more downside.


Michael is a full-time journalist at AMBCrypto. He has 5 years of experience in finance and forex and more than two years as a writer in the crypto and blockchain segments. Michael's writing at AMBCrypto is primarily focused on cryptocurrency market news and technical analysis. His interests include motorcycles and exotic cars.
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