- In the month of April, the exchanges saw an inflow of more BTC compared to the outflow.
- The outcome of the last FOMC meeting showed a slight improvement in BTC’s performance, but not enough for a sizeable rally
The state of the cryptocurrency market was in turmoil given the expected outcome of the latest meeting of the Federal Open Market Committee (FOMC). Bitcoin [BTC]thanks to its highly volatile nature, seems to be the focus of most traders active in the crypto space.
The same was highlighted by data analyst Arkham Intel in a thread posted minutes before the result of the FOMC meeting.
In 40 minutes, the Federal Open Market Committee (FOMC) will meet for the third time this year.
Since the FOMC is a major focus for both short and long term traders, we took a look at the activity on the Bitcoin blockchain leading up to the FOMC meeting 👇 pic.twitter.com/7haSPKq2GG
— Arkham (@ArkhamIntel) May 3, 2023
Read Bitcoin [BTC] Price Forecast 2023-24
The ‘before’ of the event
The thread posted by Arkham Intelligence highlighted three exchanges and levels of activity in April. Given the activity levels on Binance, BTC witnessed significant withdrawals and deposits. However, traders and investors showed a greater inclination to deposit their BTC on the exchange.
Further, OKX witnessed a similar pattern with a huge surge in activity towards the end of April. Given the activity on BitFinex, it could be seen that the exchange recorded $3 billion in BTC inflows to the exchange on April 12. In addition, traders deposited $300 million more than they withdrew.
Bitfinex’s tagged wallets recorded by far the largest consistent USD amounts of Bitcoin withdrawn and deposited.
On April 12, Bitfinex-related on-chain activity peaked, with $3 billion inflows on that day.
Within 24 hours, wallets were depositing $300 million+ more than they were withdrawing. pic.twitter.com/8TcBgjfKze
— Arkham (@ArkhamIntel) May 3, 2023
The ‘after’ of the event
At the time of writing, the outcome of the FOMC meeting was announced with a rate hike of 0.25%. According to crypto reporter, Walter Bloomberg the interest rate went from 5.00% to 5.25%. In addition, the revised rate stood at a 16-year high.
FED RAISES MAJOR OVERNIGHT RATES BY 25 BASE POINTS TO 5.00%-5.25%
— *Walter Bloomberg (@DeItaone) May 3, 2023
Just minutes after the outcome of the FOMC meeting, BTC’s four-hour chart indicated that the king of cryptocurrencies was moving in the green. At the time of writing, BTC was trading at USD 28,619. The Relative Strength Index (RSI), although at 50.09, did show some indication that it was moving above the neutral line.
In addition, the Moving Average Convergence Divergence (MACD) indicator showed some movement towards the positive. This was because the MACD line was slightly above the signal line. This could be taken as a very low bullish indication.
Source: TradingView
Does it all scream bullish?
Data from the intelligence platform Santiment showed that at press time, neither the volume of BTC nor the number of active recipients increased dramatically.
After the FOMC announcement, BTC volume, while witnessing a slight increase, stood at 16.79 billion. In addition, the number of active addresses stood at 669,000 at the time of writing.
Source: Sentiment
In addition, a look at BTC’s long/short ratio over the past four hours revealed that a greater number of traders favored longer positions than investors who supported shorter positions. At the time of writing, BTC’s long/short ratio stood at 1.02.
Source: mint glass
Furthermore, a look at BTC inflows and outflows indicated that at the time of writing, the exchange’s inflows dominated outflows, albeit by a small margin. However, this cannot be considered a good indication for BTC.
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If traders continue to deposit their BTC on exchanges for the next two or three days, BTC could turn bearish in no time. In addition, the lack of strong bullish momentum could also contribute to stronger bearish sentiment.
Source: Sentiment
Despite the aforementioned information, a tweet from IntoTheBlock stated that on May 3, 68% of BTC holders would make a profit if they sold their BTC at the current price. In addition, 28% would sell their BTC at a loss.
Currently 68% of #Bitcoin holders are in profit pic.twitter.com/ba8UqpxZKq
— IntoTheBlock (@intotheblock) May 3, 2023
Moreover, given the movement of the king coin over the past seven days, BTC has not really shown any signs of movement in either direction. However, the risk of significant downside remains, mainly due to the lack of bullish momentum in the BTC trading cycle.
