Bitcoin (BTC) was down at the opening of Wall Street on September 18 as the cryptocurrency market anticipated the Federal Reserve’s interest rate decision.
BTC/USD 1-hour chart. Source: TradingView
Bitcoin Short Liquidation Expected in FOMC Countdown
According to data from Cointelegraph Markets Pro and TradingView, the price of BTC fell 1% as the U.S. trading session began.
Traders were expecting a “big day” in the markets as the Federal Open Market Committee (FOMC) meeting and subsequent speeches and press conferences dominated the spotlight.
“Price is just below key resistance levels. Slow day expected until the ±1 hour before FOMC,” popular trader Jelle wrote in part of his latest post on X.
“There are fireworks tonight.”
BTC/USD chart. Source: Jelle/X
A key topic of discussion was the size of the expected rate cut, with both 0.25% and 0.5% seen as possible.
Changing market expectations took a 180-degree turn over the weekend, with the latter now the more likely option, according to CME Group’s FedWatch tool.
Fed Target Rate Probability. Source: CME Group
“The market knows a cut is coming. Do you think it matters whether it’s 25bps or 50bps?” asked trading resource Material Indicators as part of a post on X that shows BTC/USDT order book liquidity on the largest cryptocurrency exchange, Binance.
Binance BTC/USDT order book liquidity data. Source: Material Indicators/X
Additional data from monitoring resource CoinGlass suggests that key resistance levels are centered around $61,500 and $61,750 on the upside.
“I believe that high leverage short positions will be liquidated soon,” CoinGlass’ X account said while discussing the order book composition.
BTC Liquidation Heatmap (screenshot). Source: CoinGlass
Cointelegraph previously reported on research predicting that a return to $64,000 could come “very quickly” if the Fed announcement proves attractive for risk-taking sentiment.
Traders are “confident” that BTC price volatility is high.
Trading firm QCP Capital then said the repercussions of the Fed’s decision would not be felt only in the short term.
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“The Fed held a meeting today, the importance of which cannot be overstated. Their decisions will shape the direction of financial markets in the medium to long term,” began the latest announcement sent to subscribers of the Telegram channel.
QCP noted that expectations for the size of the reduction varied across sources, and added that these differences could be reflected in future decisions.
To summarize:
“The direction and magnitude of market moves during and after the FOMC remain unclear due to multiple layers of uncertainty: 1. Rate decision (25bp or 50bp cut) 2. Dot plot forecast 3. Powell’s post-FOMC press conference Nonetheless, we are confident that volatility will be high in the days following the meeting as traders rebalance positions over the coming weeks. A regime change could also signal the beginning of a strong macroeconomic trend.”
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.