Ethereum long positions liquidated ahead of next week's FOMC

On a quiet Sunday with little trading volume, Ethereum long positions are liquidated several times. Analyst DaanCrypto sees this as a harbinger of what could happen to positions that anticipate the US central bank’s interest rate decision next week. The Ethereum price is trading around $2.500, while Bitcoin stands at $76.700 with a loss of 0.9% over the past 24 hours.

In brief:

• Ethereum long positions are liquidated several times in a thin market
• Investors are positioning early ahead of Wednesday’s FOMC rate decision
• DaanCrypto views the current moves as noise ahead of the rate decision

Long positions liquidated in thin Sunday market

The one-minute ETH/USDT chart shows two clear spikes in open interest, followed by sharp declines. First, long positions are liquidated around 10:30, after which newly opened positions build up. Around 11:25, the same pattern repeats: long positions are again pushed out of the market.

That this happens on a Sunday is no coincidence. In periods of low volume, open positions are more vulnerable to sharp price movements, because fewer counterparties are needed to move the price. DaanCrypto points out that short positions on Bitcoin are currently also being built up.

All eyes on FOMC Wednesday

The market is in a weaker phase after a squeeze on Friday. Yet DaanCrypto views the current moves as noise. Only after Wednesday’s FOMC decision will it become clear where the market wants to go.

The US CPI figures play a role in what the Fed decides next week. Investors who position themselves early run the risk that their position is wiped out in a thin market before the decision is even made.