📉 Bitcoin and Ethereum Experience Volatile Weekend Ahead of Fed Meeting

🔄 Bitcoin and Ethereum experienced significant price fluctuations over the weekend, with Bitcoin trading between $88,000 and $92,000, and Ethereum rising from $2,910 to $3,150. This volatility was exacerbated by thin year-end liquidity in the crypto market. Despite these sharp movements, the impact on liquidations was minimal, indicating a decrease in retail interest and risk-taking among traders.

📉 Google search activity for terms like "crypto" and "bitcoin" has fallen to mid-bear-market levels, and open interest in perpetual futures has also declined significantly. BTC perpetual open interest has dropped over 44% from October highs, while ETH perpetual open interest is down more than 50%.

📊 However, a quiet trend of accumulation by larger investors is emerging. Approximately 25,000 BTC have been withdrawn from centralized exchanges in the past two weeks. For the first time, ETFs and corporate treasuries are holding more bitcoin than exchanges, suggesting that long-term holders are pulling supply off the market. Ethereum shows a similar pattern, with exchange balances reaching decade lows.

👀 Despite this on-chain accumulation, all eyes are on the upcoming Fed meeting for potential market catalysts. A 25 basis point cut is widely expected, but investors are particularly interested in any indications regarding future balance sheet policy. Even a slight hint of renewed asset purchases could bolster risk assets, including crypto.

⚖️ Currently, bitcoin is in a holding pattern, with traders closely monitoring two key levels: a drop below $84,000 or a rise above $100,000. Options traders are preparing for a decisive move, as reflected in the strong demand for wide-range structures. With liquidity already thinning, sharp price movements in either direction are likely.