A sizable Bitcoin investor, commonly referred to as a “whale”, is taking a bold gamble, predicting a significant price drop for the popular cryptocurrency. With a short position leveraging a whopping 4,442 Bitcoin (over $368 million), this savvy traveller has placed a challenging bet, expecting Bitcoin’s worth to decline. This high-risk, high-reward strategy stands to amplify both wins and losses depending on the market trend.
The whale initiated this $368 million position around the $84,043 mark and could face liquidation if Bitcoin’s price exceeds $85,592. However, the challenge has already resulted in an unrealized profit of over $2 million, despite a loss of over $200,000 in funding fees.
Riskier investment strategies like these are proving profitable for some cryptocurrecy investors. Earlier in March, one trader profited $68 million via a 50x leveraged short position on Ether’s price decline.
This audacious wager, on what is seen as a volatile currency, is being placed before a week teeming with numerous important macroeconomic revelations. The Federal Open Market Committee (FOMC) meeting scheduled for March 19, holds the potential to sway Bitcoin’s market and the investor risk appetite.
Ryan Lee, chief analyst at Bitget Research, suggested that Bitcoin needs a weekly close above $81,000 to avert a pre-FOMC downside risk. A dip below $76,000 could prompt further short-term selling. This assertion is being made as markets are pricing in a 98% chance that the Fed will keep interest rates steady, any surprise could create a ripple effect on Bitcoin and other risk assets.