Financial turbulence in the Bitcoin market, caused in part by the United States' military action against Venezuela, which has intensified market unrest ahead of the Federal Reserve meeting.
In the financial world, there's been a flurry of activity over the past few days. The VIX, also known as the Chicago Board Options Exchange's CBOE Volatility Index, has seen a 1.69% increase in the past five days, currently standing at 15.66. Similarly, the MOVE Index, or the Merrill Lynch Option Volatility Estimate, has risen 4.79% since yesterday's close, reaching 76.88 as of Tuesday morning. These indexes signal growing market uncertainty.
Meanwhile, in the cryptocurrency market, Bitcoin is currently trading at $115,018, marking a 0.2% gain in the past day. However, it's worth noting that Bitcoin is trading 2.7% lower than it was this time last month, according to crypto price aggregator CoinGecko. This dip could be attributed to geopolitical turmoil in Venezuela.
The U.S. has conducted two recent strikes on alleged Venezuelan drug trafficking vessels, with the most recent one announced on Monday, killing three people. These events have given traders pause, indicating potential impact on trading activities. Analysts at crypto exchange Bitunix have warned traders to keep an eye on developments in Venezuela, and have also advised reducing leverage and limiting single-position exposure due to potential abrupt developments.
Prediction markets show that 90% of traders expect a 25-basis point Fed rate cut tomorrow. The CEM FedWatch Tool corroborates this, showing that 96% of traders are expecting the same, leaving only 4% hoping for a bigger cut. Despite this, on Myriad, a prediction market, only 7.4% of traders expect a 50-basis point cut, suggesting a more conservative outlook.
Bitcoin's price is currently facing resistance at $117,000-118,000, with supports at $114,000 and $111,000. The geopolitical situation in Venezuela, along with the ongoing market volatility, could potentially influence these price points.
As the situation unfolds, it's crucial for traders to stay informed and make decisions based on the latest developments. The potential impact of these events on both traditional and cryptocurrency markets is a topic of ongoing interest and discussion.
