It’s been a rocky few days in the crypto market – you’ve probably noticed. Some traders and analysts, however, are anticipating a potential bounce back up in the latter half of the week.

As we reported yesterday, nerves are high ahead of the US Federal Reserve FOMC (Federal Open Market Committee) meeting on Wednesday.

Will chair Jerome Powell announce acceleration of tapering to wind back America’s stimulus-era bond-buying measures? Or… will it do an about face and hold off on that for the moment?

It feels like things could go either way with the Fed. With its previously inferred intention to hike interest rates to combat the highest level of US-dollar inflation in 40 years, mixed in with all the uncertainty regarding the new COVID variant… it’s all making for pretty muddy fiscal waters right now.

A few prominent tweeting analysts are seeing a possible “sell the rumour, buy the news” event on the Fed meeting, however. And that means the dip we’re seeing early this week might be a “priced-in” sell-off leading in to the Fed catch-up.

If the Fed then reveals a more “dovish” or moderate approach to its fiscal policy heading into 2022, then we could potentially see that “buy the news” action.

However, it’s important to keep in mind that this hope would be swiftly dashed and the stock market (and crypto) could dump further if Powell comes out and says the Fed is going full steam ahead on accelerated tapering.

 

Bitfinex traders prepare for action

According to a Cointelegraph article today, data from Bitfinex’s order book has been showing that Bitcoin traders are possibly taking up the the buy-the-news narrative.

Bitfinex is a major exchange for crypto traders and is often a go-to for savvy analysts attempting to gauge the movements of big-market players (aka crypto whales) and the meaning behind those moves.

Bid positions have been increasing on the exchange today, which Cointelegraph says is “a conspicuous sign that the market believes BTC/USD is destined to gain”.

“Bitfinex traders lay in wait in an area roughly between US$44,500 and US$46,000 on Tuesday,” wrote the US crypto media outlet.

BTC is currently changing hands for about US$47,400 having recovered some of its heavy losses from yesterday when it fell as low as US$46k.

 

 

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