Bitcoin gets $28K ‘plunge protection’ with BTC price due new volatility

    2023.07.26 | exchangesranking | 1976onlookers

    Bitcoin gets $28K ‘plunge protection’ with BTC price due new volatility

    Bitcoin  traders braced for classic volatility on July 26 as the United States Federal Reserve interest rate decision dawned.

    BTC/USD 1-hour chart. Source: TradingView

    “Let the games begin” for Bitcoin — FOMC day arrives

    Data from Cointelegraph Markets Pro and TradingView showed BTC price action hovering near $29,200.

    While barely moving since the start of the week, Bitcoin volatility was fully on market participants’ radar, with macro triggers just hours away.

    As the first of these, the Fed rates announcement was tipped to spark erratic — if unreliable — short-term BTC price moves, in line with tradition.

    Both the announcement itself and subsequent commentary from Fed Chair Jerome Powell were of interest on the day.

    “The market has priced in a 25bps rate hike, and currently also believes this will be the last rate hike in a while,” popular trader Jelle told Twitter followers in part of his latest analysis.

    “This is what makes the event interesting; what JPow says after the initial rate hike announcement.”

    Jelle was referring to practically unanimous expectations that the Fed will hike by 25 basis points. According to CME Group’s FedWatch Tool, those odds stood at 98.9% at the time of writing, with just a 1.1% chance of a 50-basis-point rise.

    Fed target rate probabilities chart. Source: CME Group

    Analyzing order book composition on the largest global crypto exchange Binance, on-chain monitoring resource Material Indicators noted that one or more entities were preparing for BTC’s price to react to the Fed with fresh losses.

    $16 million worth of “plunge protection” bid liquidity sat at just below $28,000 on the day.

    “Let the games begin,” it summarized in part of Twitter commentary.

    BTC/USD order book data for Binance. Source: Material Indicators/Twitter

    Dollar nerves return

    Beyond Bitcoin, U.S. dollar strength looked similarly undecided on trajectory ahead of the Fed.

    The U.S. Dollar Index (DXY), currently in the midst of a modest rebound after hitting its lowest in over a year, trended downhill once more on the day, nearing 101.

    U.S. Dollar Index (DXY) 1-day chart. Source: TradingView

    Traditionally inversely correlated with risk assets and Bitcoin, DXY remains a topic of interest for some BTC traders eyeing historical trends.

    Among them is popular trader Moustache, who this week revealed a copycat Bitcoin/DXY scenario echoing previous Bitcoin bull runs.

    A Bitcoin breakout, he argued, was only a matter of time.

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