- As per reports, Wall Street has become extremely defensive ahead of this week’s major risk events.
- Meanwhile, the US Dollar Index became stronger as compared with the weak risk asset market.
- Block traders are looking for a potential short-term pullback.
According to the latest findings by crypto market analysis, the abrupt dip of 4% in the price of Bitcoin yesterday was due to a decrease in risk appetite. The decrease in risk appetite is especially significant as the Federal Reserve’s upcoming Federal Open Market Committee (FOMC) meeting will be held tomorrow.
Edward Moya, senior market analyst at foreign exchange firm, Oanda, has noted that nearly $50 million worth of bitcoin positions were liquidated within 24 hours as Wall Street has become extremely defensive ahead of this week’s major risk events. In fact, the US Dollar Index has become stronger as compared with the weak performance of the risk asset market.
The DXY index briefly dipped below 102 in late January but jumped again above 102 this week.
Blofin Academy’s crypto market analytics noted:
Interestingly, the sudden drop made all dated IVs unchanged, which means that the drop is in expectation. Also, the GEX shows that $23k would be a strong resistance price level soon. ETH is more bearish as the lower positive GEX was at $1.45k, almost -10% from the spots.
As a result of these trends, block traders have become more careful. Even though weekly puts are popular, there is no trace of far-month put options trading. As large-scale short-term directional trades are rarer, traders are looking for a potential short-term pullback.
At the time of writing, Bitcoin is trading at $23,000 after dropping by 0.27% in the past 24 hours.
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