Bitcoin: $85M whale buy meets Fed FUD – Is BTC setting up a bear trap?

Every major TradFi player is pricing a rate hike.

As reported by AMBCrypto, the latest CPI figure came in slightly higher than expected, with the US August inflation rising 0.4% compared to 0.1% in July.

It left America’s inflation comfortably above the Fed’s 2% level, with the annual inflation standing at 3.4%, which would allow for the rate hikes once again.

But the story does not end here. As seen in the chart below, nearly every major financial institution now prices in a rate hike from the Federal Reserve next week, with Bank of America pricing in a 75-bps hike.

With the FOMC meeting just over 72 hours away, Bitcoin is naturally under the macro spotlight.

Given such a context, it may seem reasonable to bet against Bitcoin.

According to CoinGlass data, Bitcoin’s Long/Short Ratio for the last 24 hours has dropped to 0.79, hitting the lowest level in more than a month. Such a reading implies a shift in the sentiment among traders ahead of the FOMC decision.

Plus, with banks factoring in a rate hike, there is growing bearishness and, hence, the risk of a crowded short position if Bitcoin were to hold its ground.

According to AMBCrypto, this is where the technical and on-chain strength of Bitcoin [BTC] comes into play. Structurally, if BTC were to hold its ground against the rising onslaught of bears, a significant bear trap setup would become increasingly evident.