Bitcoin’s price drop could come to a stop on Wednesday, as Bitfinex bids suggest Fed wants to ‘buy the news.’
Following the Federal Reserve’s contributions on inflation and asset purchases on Wednesday, Bitfinex traders are expecting some gain.
As buyers line up to cash in on Wednesday’s Federal Reserve meeting, Bitcoin (BTC) may witness its final day of decline.
On December 14, bids on the key exchange Bitfinex began to move up, indicating that the market anticipates BTC-USD will rise.
It’s time to “sell the rumor, buy the news,” as the saying goes.
At the meeting, the Fed will provide vital information on the future of asset purchases — a type of quantitative easing (QE) — as well as inflation, and wagers on the impact on both crypto and traditional markets are mounting.
According to data from Bitfinex’s order book, Bitcoin traders are seeking an opportunity to “buy the news.”
“Bitfinex laying down bids
Retail selling into the lows ahead of FOMC Meeting with funding negative across the board
Feels like we’re going to get a Buy The News event #Bitcoin $BTC pic.twitter.com/9Z69rJuL0T
— Zen (@Zen_Trades1) December 14, 2021″
The Fed’s asset purchases are being tapered, thus limiting the supply of “cheap” money, and speeding up the process might put pressure on risk assets like Bitcoin until policy returns.
In the short term, though, a buy-up would reenact the events of last month’s inflation data release, giving Bitcoin a noticeable but short-lived lift.
After a day of losses, Bitfinex traders waited in an area around between $44,500 and $46,000 on Tuesday, with spot pricing currently at $46,800.
“I believe the FOMC meeting will be to sell the rumor, buy the news’ affair,” said analyst William Clemente.
“Pair that with illiquid supply back at yearly highs and some large Bitfinex bids coming in. Just waiting for $53K to start bidding. Happy to miss some of the moves and essentially pay for confirmation.”
Bitcoin traders are far from docile
On-exchange order books, evidence of progressively bearish whales stays.
Large-volume traders have been consistently selling since October, according to Material Scientist, author of the on-chain analytics site Material Indicators.
Material Scientist wrote on Twitter, “They haven’t bought a single dip since October this year and have been straight-up TWAP-selling all this time.”
Some exceptions have made the news, and whales — the largest group of exchange participants — have shown interest in buying. Despite this, evidence shows that resistance to $60,000 is increasing with time.
In a separate article, Material Indicators stated, “We have yet to see any of the BTC drops over the last month bought with true conviction.”