Journalist
Posted:
- The Federal Reserve’s next rate hike could reverse Bitcoin’s recent gains.
- A look at what BTC traders can expect in the event of a bearish outcome.
Bitcoin [BTC] has just concluded an exciting week marked by the return of volatility and rising demand. At the same time, the long-term downtrend that has occurred in recent weeks has left BTC holders concerned about the short- to medium-term prospects.
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There is renewed hope and excitement now that the Bitcoin bulls are back. However, there is one key situation that could halt BTC’s upward momentum or even erase its recent gains.
In particular, the US Federal Reserve is about to make an announcement about its next interest rate decision. A rate hike could mislead investors and lead to more price suppression.
Trending news: FED could raise rates again?! To make it easier to deal with this news, here’s a limerick:
Once upon a time there was a man named Powell,
Whose interest rate increases are frowned upon by many.
The markets fell,
Investors turned around,
And people started throwing in the towel. https://t.co/2vaeUOgqXf— LunarCrush Social Trends (@LunarCrush) September 15, 2023
Another example of selling pressure would prevent Bitcoin from recovering to the $30,000 range. Perhaps it could even push back to the lower $20,000s.
But is there a chance that Bitcoin can avoid even more downsides? Well, whales and institutional investors have participated in this, contributing to the bullish momentum.
Are Bitcoin Whales Playing the Market Again?
Bitcoin addresses holding at least 1,000 and 10,000 BTC were running on September 11 after previously contributing to the selling pressure. This confirmed the bullish whale activity. In this case, however, we need to determine whether there may be inbound selling pressure.
Source: Glassnode
Despite the accumulation of whales, the realized limit remains low, meaning that most buyers who purchased BTC in the last 30 days are still not making a profit. In other words, there isn’t much incentive to sell, so the potential downside may be limited.
Meanwhile, the recent recovery of confidence in the market has attracted many new addresses. According to the latest Glassnode alerts, the number of new Bitcoin addresses just hit a new five-year high.
📈 #Bitcoin $BTC Number of new addresses (7d MA) just reached a 5-year high of 26,005,952
The previous five-year high of 25,964.494 was observed on January 9, 2021
View statistics:https://t.co/tDzY9Fl7QL pic.twitter.com/VcrO1v1pKH
— Glassnode Alerts (@glassnodealerts) September 15, 2023
The observation suggested that the recent revival of bullish momentum could attract many retail investors. This could also highlight a potential risk in the coming days.
An adverse interest rate outcome could leave retailers at the mercy of the whales. This is because retail could provide enough liquidity for the whales.
Read Bitcoin’s [BTC] Price forecast 2023-2024
If the above outcome occurs, there is a possibility that Bitcoin will give up its recent gains despite the recent bullish divergence. On the other hand, it is also possible that most of the selling pressure has already been priced in.
If that’s the case, investors should expect a limited downside, possibly followed by accumulation, as whales take advantage of the discount.
