Ethereum Set For Reversal? Smart Money Bets $13M Ahead of FOMC Decision

A smart Ethereum trader, with a remarkable record in swing trading, recently made headlines for betting over $13 million on ETH. This move comes amid a bearish crypto market as the Federal reserve rate cut decision nears. Moreover, the trader seems to be bullish on the upcoming announcement.

Smart Trader Bets Big On Ethereum

Earlier this week, the crypto trader in question executed his sixth consecutive winning trade in just 15 days, turning 4,821 ETH into 5,690 ETH. This brought him a profit of 869 Ethereum, equivalent to $2 million. However, his latest trade has taken a surprising turn, as he incurred his first loss, according to Lookonchain data.

On Tuesday, this trader sold 5,690 ETH, valued at $13.1 million, at a price of $2,304. Shortly after, he bought back 5,660 ETH at $2,316, resulting in a loss of 30.8 ETH, worth $71.4K.

This smart trader with a 100% win rate has just completed another trade, but this time he lost money!

He sold 5,690 $ETH($13.1M) at $2,304 yesterday and bought back 5,660 $ETH($13.1M) at $2,316 just now, losing 30.8 $ETH($71.4K)!https://t.co/6j9IRgvFNM pic.twitter.com/iPEoF5fY9q

— Lookonchain (@lookonchain) September 18, 2024

Despite this minor setback, his consistent track record of buying low and selling high suggests that he still expects Ether price to rise. As of Wednesday, September 18, ETH price dipped 3.19%, trading at $2,299.65.

The trader’s recent move comes just ahead of a significant Federal Open Market Committee (FOMC) decision, with market participants widely anticipating a rate cut by the Federal Reserve. The current market sentiment favors a 50 basis points (bps) cut, although opinions are split on the exact figure.

JPMorgan has forecasted a 50 bps cut. However, prominent organizations like BlackRock argue that such a steep cut would be excessive, predicting a more modest 0.25% reduction.

Impact of FOMC Decision

Mark Matthews of Bank Julius Baer & Co. also expressed caution, according to CNBC. He noted, “A 25 basis points rate cut by the US Federal Reserve could disappoint the market that has already priced in a 50 basis point cut.”

Matthews further explained that despite the futures market pricing in a 60 bps cut, he expects an official 25 bps cut. However, a 50 bps cut is also possible and “would not be a policy mistake.”

If the Federal Reserve does opt for a larger 50 bps rate cut, the broader cryptocurrency market could see a rally, potentially benefiting Ethereum. With such a scenario, the smart trader’s move might prove well-timed in anticipation of a rebound. However, if the central bank opts for a more cautious approach, Bitcoin, Ether, and the entire crypto market could suffer.

Amid these macroeconomic uncertainties, Bitwise CIO Matt Hougan offered a broader perspective on Ethereum’s future. “It’s cool to hate Ethereum right now,” he remarked. Hougan pointed out that Ethereum’s year-to-date performance has been flat compared to Bitcoin’s 38% rise and its competitor Solana’s 31% surge.

Nevertheless, he remains bullish on ETH. He emphasized the network’s dominance in key areas: “More than half of all stablecoins are issued on Ethereum. Over 60% of all DeFi assets are locked on Ethereum.” Also, the one-of-its-kind prediction market, Polymarket also operates on Ether.

In his concluding thoughts, Hougan suggested that ETH remains a strong player despite its recent challenges. He called it “a potential contrarian bet through the end of the year.”

Also Read: US Fed Interest Rate Cuts to Be Decided Today: What Do Experts Say?