Bitcoin (BTC) could see its last day of downside as buyers line up to cash in on Wednesday’s United States Federal Reserve meeting.
On Dec. 14, bids began increasing on major exchange Bitfinex in a conspicuous sign that the market believes BTC/USD is destined to gain.
Time to “sell the rumor, buy the news?”
The Fed will deliver key information on the future of asset purchases — a form of quantitative easing — as well as inflation at the meeting, and bets are rising about the knock-on impact for both crypto and traditional markets.
Data from Bitfinex’s order book suggests that Bitcoin traders are eyeing an opportunity to “buy the news.”
As Cointelegraph reported, the Fed tapering its asset purchases effectively limits the availability of “easy” money, and accelerating the process could pressure risk assets such as Bitcoin until a slackening of policy returns.
For the short term, however, a buy-up would echo events from last month’s inflation data print, this producing a conspicuous but short-lived boost to BTC.
Bitfinex traders lay in wait in an area roughly between $44,500 and $46,000 Tuesday, with spot price currently at $46,800 after a day of losses.
“Think FOMC has a good chance to be a ‘sell the rumor, buy the news’ event,” analyst William Clemente added.
“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 move and essentially pay for confirmation.”
Bitcoin traders anything but docile
Elsewhere, evidence of increasingly bearish whales persists on exchange order books.
As noted by Material Scientist, creator of on-chain analytics resource Material Indicators, large-volume traders have been continually selling since October.
“They’ve not bought a single dip since October and have been straight-up TWAP-selling all this time,” Material Scientist commented on Twitter.
Some exceptions have hit the headlines, and whales — the largest volume cohort of exchange activity — have exhibited buying interest. Yet according to the data, $60,000 resistance is still increasing with time.
“We have yet to see any of the BTC dips over the last month bought with real conviction,” Material Indicators added in a separate post.
