After a brief surge above its peaks, the cryptocurrency market faces a new sharp correction, potentially orchestrated to trigger liquidations. This volatility, linked to investors' nerves ahead of a crucial statement by Federal Reserve Chair Jerome Powell, raises questions of manipulation or strategic anticipation. Dive into this two-part fall analysis.
The mechanics behind this correction appear to be a classic crypto market scenario: a bidirectional liquidity hunt. Initially, the market orchestrated a rapid rise in Bitcoin up to $124,000, just above its previous All-Time High. The objective was clear: trigger a cascade of liquidations on short positions that were betting on a decline.
Once this liquidity was “captured,” the movement reversed with equal violence. As analyst @KillaXBT points out, the market is now targeting the liquidity of long positions. The critical zone sits below $120,000, where stop-loss orders from over-leveraged investors have accumulated. This zero-sum game, where major operators force liquidations for their own profit, is characteristic of markets lacking clear direction.
This technical maneuver is amplified by a major macroeconomic event: Jerome Powell’s speech, scheduled today at 8:30 AM EST. On the eve of a potential announcement regarding the next interest rate cut, uncertainty is at its peak. This nervousness creates an ideal playground for market manipulation.
Is the current volatility simply anticipation of the Fed’s announcements, or are major market players using this event as a pretext to orchestrate their liquidation hunt?
The answer is likely a mixture of both. Powell’s intervention acts as a catalyst, providing the perfect cover for extreme price movements aimed at purging the crypto market of excessive leverage. The direction the market takes after Powell’s speech will reveal whether this correction was just a healthy purge or the beginning of a deeper bearish trend.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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