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News/Is BTC setting up a bull trap hours before the FOMC meeting?

Is BTC setting up a bull trap hours before the FOMC meeting?

Sep 21 2022

2 years ago5 mins read
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Bitcoin and the S&P 500 are both maintaining their respective levels of $19,000 and 3,890 from yesterday despite being hours away from this month’s FOMC meeting. In fact, we can see traders eagerly taking their positions — mainly on the futures market — with the majority expecting a move to the upside.

futures data.png Source: Binance Futures Data

70% of the traders could find themselves on the wrong side of this trade once volatility unfolds, and with an open interest of \(2.185B we can potentially see \)1.52B worth of longs taking a loss if price breaksdown.

OI FUTURE.png Source: Binance Futures Data

BTC price recorded a modest 2% gain in order to stay above $19,000, even though DXY reached its highest level in twenty years, posting 110.86 earlier today. The surge in DXY is understanable, given that it is a safe-haven for investors offloading risk-on assets in response to hawkish monetary policy decisions. However, BTC’s stability is interesting, and could hint toward a potential bull trap for late longers.

At this point, we can assume that the market is ready for a 75bps hike — any big moves, however, are likely dependent on post-meeting guidance provided by the Fed chair.

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Top altcoin gainers and losers

Gainers:

Chain XCN (+5.88%) Ripple XRP (+5.57%) Litecoin LTC (+5.03%)

Losers:

Phoenix Global PHB (-5.34%) Algorand ALGO (-4.69%) Osmosis OSMO (-3.91%)

BTC Technical Analysis

BTC is range bound between \(20,500 and \)18,200, with the former being a strong, horizontal resistance level reinforced by the 200 EMA on the 4H chart.

On the other hand support towards the downside is constantly being tested at \(18,700. However, we are yet to have another retest of \)18,200, and potentially the June lows of $17,700, before bulls can start considering a strong recovery.

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ETH Technical Analysis

Currently trading at \(1,348, [ETH price](https://coin360.com/coin/ethereum-eth) has shown weakness due to its low volume. The key range for bulls to monitor right now is \)1280-\(1250 which proved to be a double top in June. If Ethereum can flip this previous resistance into a strong support, we can see some potential upside. Otherwise a dive to \)1,060, as mentioned earlier, seems more and more probable.

On the flip side if the market turns green after the meeting today we’ll look toward \(1,440 and \)1,650 as the next targets.

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Coin360 Daily Digest

Apart from the FOMC being the major highlight for today, here’s a run down of some of the major news stories from the crypto market.

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For more daily updates and news, follow us on Twitter.

Disclaimer: None of the information here constitutes financial advice and market participants are advised to conduct their own research since cryptocurrencies are speculative assets with considerable risks.

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