Bitcoin Zilla is betting hundreds of millions of dollars on a short-term decline in Bitcoin prices ahead of a critical week filled with key economic reports that could have a major impact on its trajectory and investor risk appetite.
Large crypto investors, or whales, have opened a 40x leveraged short position with over 4,442 Bitcoin (BTC) (over $338 million Worth).
In a leveraged position, you use the money you borrow to increase the size of your investment. This increases the magnitude of both profit and losses, and leveraged transactions are more risky compared to regular investment positions.
Bitcoin Zilla opened a $368 million position for $84,043 and faced liquidation when Bitcoin prices exceeded $85,592.
Source: Hypurrscan
The investor has generated more than $2 million in unrealized profits, but he has lost more than $200,000 in funding fees for his position, Hypurrscan data shows.
Despite the increased risk of leveraged trading, some crypto investors are making significant profits from this strategy. At the beginning of March, the savvy trader won $68 million in a 50x leveraged short position and deposited a bank with a lower price of ether (ETH).
The leveraged bet comes a week before many important macroeconomic releases, including the Federal Open Market Committee (FOMC) meeting, which will be held on March 19th.
Related: Bitcoin's Next Catalyst: 36T $36T US Debt Cap End of Suspension
Bitcoin needs to be nearly $1 a week above $81,000 to avoid pre-FOMC shortcomings
Bitcoin prices continue to risk significant downside volatility due to increased macroeconomic uncertainty regarding global trade tariffs.
To avoid the volatility of shortcomings ahead of the FOMC meeting, Bitcoin needs the end of the week per week exceeding $81,000, according to Ryan Lee, chief analyst at Bitget Research.
The analyst told Cointelegraph:
“The key level for monitoring weekly closings is in the $81,000 range, and keeping it above indicates resilience, but drops below $76,000 could lead to shorter term sales pressure.”
Related: Bitcoin experiencing “shakeout” not the end of the 4-year cycle: Analyst
Analyst comments will be made a few days before the next FOMC meeting scheduled for March 19th. According to the latest estimates from CME Group's FedWatch Tool, the market is currently priced at a 98% chance that the Fed will stabilize interest rates.
Source: CME Group's FedWatch Tool
“The market primarily expects the Fed to be stable, but the unexpected Hawkish signal could put pressure on Bitcoin and other risky assets,” the analyst added.
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