Cryptocurrency Volatility: What Traders Are Paying Attention to This Week
- From the 'extreme greed' level in May, market sentiment has cooled down, approaching a neutral state.
- Traders are proactively betting on price increase trends just before the Fed's interest rate decision.
Cryptocurrency market sentiment is gradually retreating to near neutral before the Fed's crucial interest rate decision this week and escalating Israel-Iran tensions.
Completely opposite to the previous week (sentiment point of "greed" at 62) and the "extreme greed" phase reaching 78 in May, the index has now adjusted to 60.
Bitcoin: Sustainability and Conflicting Signals
The Fed's interest rate decision on June 18 is one of the key events for the market this week. However, the market has already priced in over 99% probability of interest rates remaining at 4.25-4.50%.
Notably, inflation in the United States remains controlled, and most experts expect the Fed might adopt a rate reduction policy in the third quarter (expected September).
If interest rates decrease, cheaper capital flows will mean higher risk tolerance, creating a major momentum for the cryptocurrency market, especially Bitcoin (BTC). However, any "hawkish" messages from the Fed will trigger a defensive risk management stance for investors.
Conversely, a "dovish" tone could support strong market growth. However, hot geopolitical factors in the Middle East will likely continue to overshadow price developments until a resolution is found.
Surprisingly, data from glassnode records positions still leaning towards increase, with strong demand for short-term call options (market growth expectations) compared to put options (decline expectations).
Regarding price positioning and large capital flows, the analysis suggests Bitcoin's structure remains intact but trades in a tactical price range, lacking truly strong spot market confidence.
In price movement, a liquidity pool worth over $6 billion appears above if BTC breaks the 112K mark. Simultaneously, a $5.9 billion pool forms below, creating a counterbalancing force.
Price zones at 103K, 108K, and 110K act like magnets, potentially causing BTC price to jump to 110K-112K or drop to 103K.
