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Hawkish Fed Has Bitcoin Market Feeling Most Fearful in 3 Months

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Crypto traders initial worries about a hawkish Fed materialized Wednesday as Chairman Jerome Powell cut interest rates but expressed uncertainty about the speed and extent of future easing. And now the sentiment has deteriorated.

Bitcoin’s seven-day call-put skew shows that Deribit-listed put options offering downside protection and expiring in one week are trading at the highest implied volatility premium to call options since September, according to data source Amberdata. In other words, put options are the most expensive relative to calls in three months.

Its a sign of traders scrambling to hedge their bullish bets against a potential continuation of Wednesday’s price slide, triggered by a hawkish Fed.

The dour sentiment is also evident from the negative one-month skew, reflecting a bias for puts and a significantly weaker call bias in options ranging from two to six months. These calls traded at a 3 vol premium to puts at press time, down from the 4-5 vol premium observed early this month.

On Wednesday, the Fed cut the benchmark interest rate by 25 basis points to the 4.25% to 4.5% range. That’s 100 basis points lower than the September levels when it began the easing cycle.

Bitcoin declined following the rate cut, as Fed Chairman Jerome Powell described it as a close call and emphasized caution regarding future moves as rates approach the neutral level.

Powell also said that the Fed has no intention of participating in any government plan to create a strategic bitcoin reserve, adding that board members do not intend to push for changes to the Fed law. This comes after President-elect Trump’s recent mention that his administration would consider establishing a BTC reserve similar to the country’s oil stockpile.

Meanwhile, the dot plot, an anonymous graphical representation of where the 19 committee members project the fed funds rates will be in the future, signaled only two rate cuts in 2025 instead of three expected and down from four in September.

The dot plot essentially out-hawked the markets, sending risk assets lower. While Dow Jones ended bled 2.5% or over 1,000 points, BTC slipped from roughly $105,000 to under $99,000, according to data source TradingView and CoinDesk.

As of this writing, BTC is trading at around $101,200, aiming to recover from overnight losses.

Meanwhile, the dollar index, which gauges the greenback’s value against major currencies, continues to hold on to its overnight gains, holding steady near 108, the highest level since October 2022. A persistent strength in the USD could add to risk assets’ woes.

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Ethereum Surges After Holding $2,477, Fueled by Very Heavy Trading Volume

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Global economic tensions and trade disputes continue to influence cryptocurrency markets, with ETH showing resilience despite broader market uncertainty.

The second-largest cryptocurrency is currently navigating a critical technical zone between $2,500-$2,530, which analysts identify as immediate resistance that must be overcome for continued upward movement.

Institutional interest remains strong, with spot Ethereum ETFs recording consecutive days of positive inflows, signaling growing confidence from larger investors despite the recent volatility.

Technical Analysis Highlights

  • 24-hour ETH price action revealed a substantial 3.5% range ($99.85).
  • Sharp sell-off during midnight hour saw price plummet to $2,477.40, establishing a key support zone.
  • Extraordinary volume (291,395 units, nearly 3x average) confirmed the significance of the support level.
  • Buyers stepped in at the $2,467-$2,480 support band, confirmed by high-volume accumulation during the 08:00-09:00 period.
  • Recent price action shows bullish momentum with ETH reclaiming the $2,515 level.
  • Potential higher low pattern suggests the correction may have found its bottom.
  • $2,520-$2,530 area remains the immediate resistance to overcome for continued upward movement.
  • Significant bullish surge at 13:35 saw price jump from $2,515.85 to $2,521.79, accompanied by exceptional volume (5,839 units).
  • Sharp reversal occurred at 14:00, with price dropping 5.07 points to $2,508.02 on heavy volume (4,043 units).
  • Hourly range of 14.46 points ($2,508.02-$2,522.48) demonstrates market indecision.

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XRP Plunges Below $2.30 Amid Heavy Selling Pressure

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Global economic tensions are weighing heavily on cryptocurrency markets as XRP experiences a significant correction amid heavy selling pressure.

The recent announcement of potential 50% tariffs on European Union imports by the US government has triggered widespread market uncertainty, with XRP falling alongside most major cryptocurrencies despite Bitcoin recently reaching new all-time highs.

Technical analysts point to critical support at the $2.25-$2.26 range, with market watchers warning that a break below this level could trigger deeper corrections toward the $1.55-$1.90 zone.

Meanwhile, institutional interest remains strong with Volatility Shares launching an XRP futures ETF and leveraged ETF inflows surging despite the price dip, suggesting Wall Street continues accumulating positions during market weakness.

Technical Analysis Highlights

  • XRP underwent a notable 3.46% correction over the 24-hour period, with price declining from $2.361 to $2.303, creating an overall range of $0.084 (3.57%).
  • The most significant price action occurred during the midnight hour (00:00), when XRP plummeted to $2.297 on exceptionally high volume (37.1M), establishing a strong volume-based support zone.
  • A secondary sell-off at 08:00 saw price touch the period low of $2.280 with the highest volume spike (39.9M), confirming a double-bottom formation.
  • In the last hour, XRP experienced significant volatility with a recovery attempt following the earlier correction.
  • After reaching a low of $2.297 at 13:11, price formed a base around $2.298 before staging a substantial rally beginning at 13:27, peaking at $2.307 at 13:36-13:39 with exceptionally high volume (627K-480K).
  • This bullish momentum created a clear resistance zone at $2.307, which was tested multiple times.
  • The final 15 minutes saw profit-taking pressure emerge, with price retracing to $2.300, establishing a short-term support level that aligns with the psychological $2.30 threshold.

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Bitcoin Drops Below $107.5K as Trump Tariff Threat Triggers Crypto Sell-Off

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Bitcoin’s recent pullback has established strong volume-based resistance near $108,300, with support forming in the $106,700-$107,000 zone.

The correction accelerated with a notable price surge from $107,373 to $107,671 between 13:06-13:36, followed by a sharp reversal.

Technical analysis suggests Bitcoin is now trading within a compression zone, trapped between two major fair value gaps that will determine the upcoming market direction.

If bulls reclaim the $109K to $110K area, price could push toward resistance beyond $112K, while a break below $107,000 might test liquidity around $106K.

Technical Analysis Breakdown

  • The decline accelerated during the 22:00-23:00 hour on May 24th with exceptionally high volume (16,335 BTC), establishing a strong volume-based resistance near $108,300.
  • Support has formed in the $106,700-$107,000 zone where buyers emerged during the 09:00-10:00 period on May 25th, though recovery attempts have been modest with price consolidating around $107,500.
  • The overall technical structure suggests a short-term bearish trend with potential for further consolidation before directional clarity emerges.
  • Bitcoin experienced significant volatility with a notable price surge from $107,373 to $107,671 between 13:06-13:36, followed by a sharp reversal that saw prices decline to $107,393 by 14:00.
  • The most substantial price movement occurred during the 13:35 minute candle where BTC jumped nearly $150 with exceptionally high volume (148.76 BTC), establishing temporary resistance around $107,630.
  • Support formed near $107,400 where buyers emerged during the final minutes of the period, though the overall technical structure suggests continued consolidation within the broader correction from the $109,239 high.

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