A whale increased its long exposure to Bitcoin and Solana on Thursday, the 2nd of July. The whale put over $70M on the line.
Additionally, the trader opened a 10X short position on Hyperliquid [HYPE], bringing the total bet to over $78M.
Initially, the bet seems to be playing out well, with an unrealized profit of about $9.2M.
The positive unrealized PNL (profit and loss) followed a relief rally following the weaker US Jobs report data. In most cases, weaker Jobs report data suggest that the Fed would reconsider its previous leaning toward rate hikes to boost the labor market.
Subsequently, any Fed rate cut expectations tend to boost risk-on sentiment, fueling a relief rally across crypto and equity markets. In fact, the stock market posted mixed results.
As of writing, Google Finance showed that S&P and Nasdaq Futures were green, suggesting the recovery could climb higher.
Will the Fed ruin Bitcoin and Solana recovery?
Still, the Fed rate expectations didn’t change much after the weak Jobs report. According to the FedWatch tool, odds of another interest rate hike dropped from 28% to 17%, nearly a 2x dip.
In fact, this eased rate hike fears, likely fueling the mid-week relief recovery as BTC climbed towards $62K. But eased fears didn’t mean an automatic rate cut.
Interest traders were placing an 83% chance that the Fed would keep the interest rate unchanged at the current 3.50%-3.75% ahead of the end-of-July meeting. After the July 4th weekend, FOMC Minutes will be released next Wednesday, July 8th.
The low-liquidity weekend and the upcoming FOMC Minutes could still trigger market volatility.
In fact, as of writing, the whale was already down $1.2M, largely weighed down by the HYPE short position, which was down 70%. A hawkish Fed rate pause could likely expose the whale to more losses.
In the meantime, smart money investors were doubling down on Solana [SOL] at the current $81 level. This cohort increased bidding by 129% in the past 24 hours.
What’s next for Bitcoin, Solana?
However, for Bitcoin, short positions were piling up as the king coin attempted to reclaim $62K. There was over $2B in short positions, commanding a 57% dominance as of the time of writing.
This meant Bitcoin [BTC] traders were increasingly bearish after the relief bounce towards $62K. It also creates the best conditions for a short squeeze. But that depends on how the market will react to the FOMC Minutes.
Still, the $62.3K and $65K overhead hurdles must be cleared for a sustained recovery.
Final Summary
- A whale increased long exposure to Bitcoin and Solana to over $70M after a weak US jobs report
- While the Fed rate hike fears eased, a hawkish interest rate pause could renew the market sell-off
