Short Positions Increase: David Zimmerman, an analyst at K33, noted that CME traders have increased their short positions over the past two days. “CME active traders increased their exposure by 5,500 bitcoins over the past two days, while premiums hit a nine-month low, indicating a shift toward bitcoin shorts,” Zimmerman explained.
Fed Decision Expectations: The Federal Open Market Committee (FOMC) is scheduled to announce its latest interest rate decision at 2 p.m. ET Wednesday. Rate traders are now pricing in a 50 basis point cut, the first in four years.
Market signals:
– Bitcoin Futures Contract premium on CME has fallen below 5% for the first time since January 15.
– Perpetual Futures Contract funding rates rose while CME Futures Contract premiums fell, described as “generally a short-term negative signal.”
Volatility Prediction: Zimmerman suggests that the CME bitcoin Futures Contract market is signaling concerns about the potential for high volatility, similar to what was observed following the recent US CPI report.
Economic impact: While rate cuts may improve liquidation for risk assets, investors remain concerned about the possibility of an economic recession.
Optimistic prediction: Contrary to the cautious trend, Anthony Scaramucci, founder of SkyBridge Capital, predicts that the combination of Fed rate cuts and favorable cryptocurrency regulations could send Bitcoin to new highs, possibly reaching $100,000 by the end of the year.
The increase in Bitcoin short positions by CME traders reflects the market’s cautiousness ahead of the Fed’s important decision. However, with varying predictions on the impact of the rate cut, the cryptocurrency market could see significant volatility in the coming period.
The article CME Traders Increase Positions Ahead of Fed Rate Decision appeared first on Coin79 - Update Coin News and Crypto Investment Knowledge .
