- Bitcoin investors brace for macro clarity from the upcoming Federal Reserve meeting.
- As risk-off flows intensify, there’s potential for liquidity grabs both above and below key levels.
No doubt, Bitcoin [BTC] stepped into May with a dose of “cautious optimism,” tapping a quarterly high of $97,915 early on. But in under a week, it’s already shed 3.38% of that value, reflecting residual FUD pressure.
This market indecision, however, doesn’t signal structural weakness. Rather, it suggests a strategic pause. The next move being contingent on post-FOMC liquidity conditions.
Investors strategize as macro headwinds loom
Since the election, inflation data has become a key market catalyst. As a result, investors now closely watch for any signs of a shift in risk appetite based on these readings.
U.S. inflation has experienced a sharp deceleration, with the rate dropping from 3% at the start of 2025 to a mere 1.45%, significantly below the Federal Reserve’s 2% target.
Source: Trifulation.com
In essence, cooling demand month-on-month paves the way for liquidity injections, which could prime risk assets for capital inflows. In line with this sentiment shift, institutional whales are positioning long.
Notably, a large player entered a $136 million Bitcoin position with 40x leverage. According to AMBCrypto, this sizable leveraged bet signals strategic positioning in anticipation of a risk-on rally.
Bitcoin gears up for directional break as liquidity tightens
As macro-driven volatility rises amid deflationary conditions, Bitcoin’s liquidity landscape is entering a critical phase.
On the 12-hour timeframe, three high-density liquidity clusters are converging, each surpassing $50 million in open interest—a signal of heightened liquidation risk.
A pivotal moment occurred at $94,760.69, where $48.19 million in long positions were forcibly liquidated. This cascade effect sent Bitcoin plummeting to $94,600 within minutes.
Source: Coinglass
Despite the deleveraging event, long bias remains dominant in the perpetuals market.
However, if the Fed reinforces a hawkish macro posture, risk appetite across the crypto derivatives landscape could deteriorate, leading to further downside volatility.
Structurally, Bitcoin appears primed for a directional expansion, leaning more towards a bearish outcome.