Bitcoin put traders to a nervous test again on Wednesday with a new sudden increase above $40,000, which eventually ended in a matter of minutes.
Shorts Felt Burnt Following the Abrupt Rise to $41,700
Reports published by TradingView and CoinTelegraph Markets Pro revealed that BTC/USD spiked suddenly to heights reaching about $41,700 on Bitstamp, and it instantly reversed after that. It took just two candles for the whole market to increase by $2,000, break all important barriers, and return to their initial positions before the sudden increase.
BTC/USD price chart. Source TradingView
While the move has become commonplace in recent times, it did not go without leaving its scarce on casualties, as made evident by various shades of liquidation in a cross-section of crypto exchanges. As seen in reports published by an on-chain track-keeping platform, Coinglass, Bitcoin could account for up to $98 million of those liquidities in the course of the previous 24 hours at the time of putting this piece together. The total available liquidation of crypto assets in that period amounted to just a bit above $200 million.
While it was still grappling with its grounded trading sphere, the BTC/USD pair managed to break resistance at the $40,000 and $41,000 levels before the $41,000 level later gained strength immediately the pair got deflated in their strength.
Bitcoin maintained $41,000 as the sell-side constraints on Wednesday, and a major build-up of traders was yet to appear at $40,000, as reported by the order book of Binance, which was put together by track-keeping platform, Material Indicators.
Sleep-off Till the Federal Reserve Announces Interest Rate Increase?
In the view of many analysts, what happened in the immediate past is nothing compared to what holds in the immediate future as the Federal Reserve is set to unveil its new monetary policy decisions. Any moment after mid-day, the Federal Reserve is scheduled to make it known what its interest rate directions are. It is a move many have been anticipating as a possible paradigm shift in the US price dynamics.
As for the popular personality analyst and financial market trader who goes by “Crypto Ed,” he took to his tweet page to basically tell his followers and interested audience that there was nothing yet to see till the Federal Reserve makes its announcement.
Another Twitter user going by “PlanC,” however, argued that the market was already accounting for the expected 25 basis points increase in interest rates, but the new announcement is not likely to aid larger inflationary forces, while they equally suggest Bitcoin as a viable preserve of value.