Longs and shorts have been caught in another trap causing over $200 million in cross-crypto liquidations. Bitcoin (BTC) traders’ nerves were once again tested after a spike over $40,000 ended within minutes. Fed rate action will be announced on Wednesday.
On Wednesday, TradingView data showed that BTC/USD quickly surged to $41,700 on Bitstamp — before falling back down immediately. In just two hours, the entire market jumped by $2,000, broke significant resistance levels, and then came crashing back down.
Liquidations across exchanges illustrate that the move, although commonplace, was not without casualties. According to data from the on-chain monitoring resource Coinglass, Bitcoin accounted for 98 million of these liquidations in the last 24 hours. Overall crypto liquidations amounted to just over $200 million during the period.
Although still within its established trading range, BTC/USD broke through resistance at both $40,000 and $41,000 before the price strengthened once the pair deflated. Data from Binance’s order book compiled by monitoring resource Material Indicators showed that the sell-side pressure remained at $41,000 on Wednesday. However, a significant influx of sellers had yet to reappear at $40,000.
Markets Await Fed Reserve Rate Announcement
According to analysts, the immediate past paled insignificance compared to what was slated for Wednesday. The U.S. Federal Reserve will announce its interest rate actions at 2 pm Eastern Time. A development many are keenly following as a potential price paradigm shift.
Twitter account PlanC, meanwhile, said that the market already accounted for the expected rate hike of 0.25%. However, it would not provide any relief for macro inflationary forces, which themselves promote BTC as a store of value. “The FED will raise rates 25 basis points, which is already priced in and will do nothing to stop inflation,” the account stated.
At the time of writing, BTC/USD was trading at roughly $39,500, still above Tuesday’s levels.