A savvy Ethereum trader with a strong track record in swing trading has recently made headlines after he bet over $13 million on ETH. The move comes amid bearish sentiment in the crypto market as the Federal Reserve approaches a decision on interest rates. Moreover, the trader appears bullish on the upcoming announcement.
Smart traders bet big on Ethereum
Earlier this week, the crypto trader in question executed six consecutive winning trades in just 15 days, turning 4,821 ETH into 5,690 ETH, earning him a profit of 869 Ethereum, or $2 million. However, his latest trade took a surprising turn, resulting in his first ever loss, according to Lookonchain data.
On Tuesday, the trader sold 5,690 ETH (worth $13.1 million) for $2,304. Shortly after, he bought back 5,660 ETH for $2,316, resulting in a loss of 30.8 ETH (worth $71,400).
This savvy trader with a 100% winning rate has completed yet another trade, but this time he has lost money.
He sold 5,690 $ETH($13.1 million) Bought back $5,660 yesterday at $2,304. $ETH($13.1 million) Now $2,316, down 30.8 $ETH($71.4K)!https://t.co/6j9IRgvFNM pic.twitter.com/iPEoF5fY9q
— Lookonchain (@lookonchain) September 18, 2024
Despite this minor setback, he expects the price of Ethereum to rise, as he has a track record of consistently buying low and selling high. As of Wednesday, September 18, the price of ETH was down 3.19% and trading at $2,299.65.
Traders' recent moves come just before a key Federal Open Market Committee (FOMC) decision, with market participants widely expecting a rate cut from the Federal Reserve. Current market sentiment favors a 50 basis points (bps) rate cut, though there is disagreement on the exact figure.
JPMorgan is predicting a 50 basis point cut, but prominent institutions like BlackRock have argued that such a big cut would be overkill and are predicting a more modest cut of 0.25%.
Impact of FOMC decision
Mark Matthews of Julius Baer Bank also expressed caution, writing, “A 25 basis point cut from the Fed could disappoint a market that is already pricing in a 50 basis point cut,” according to CNBC.
Matthews further explained that while futures markets are pricing in a 60 basis point cut, he officially expects a 25 basis point cut, but a 50 basis point cut is also possible and “it wouldn't be a policy mistake,” he said.
If the Federal Reserve chooses to cut interest rates by a significant 50bps, the entire cryptocurrency market could rise, benefiting Ethereum. In such a scenario, smart trader moves could prove to be well-timed in hopes of a recovery. However, if the central bank chooses a more cautious approach, Bitcoin, Ether, and the entire cryptocurrency market could take a hit.
Amid this macroeconomic uncertainty, Bitwise Chief Investment Officer Matt Hogan offered a broader perspective on Ethereum's future. “It's cool to hate Ethereum right now,” he said. Hogan noted that Ethereum's year-to-date performance has been flat compared to Bitcoin's 38% gain and rival Solana's 31% gain.
Still, he remains bullish on ETH. He emphasized that the network has an advantage in key areas: “More than half of stablecoins are issued on Ethereum. More than 60% of DeFi assets are locked on Ethereum.” Also, the unique prediction market Polymarkets runs on Ethereum.
Hogan concluded by suggesting that ETH remains a strong player despite its recent difficulties. He called ETH a “potential contrarian bet through the end of the year.”
Related article: US Federal Reserve to cut interest rates today: What do experts say?
