Simply put
- The US has conducted two strikes against a vessel suspected of drug trafficking in Venezuela, resulting in the deaths of 14 people, including President Maduro.
- Despite the geopolitical unrest, analysts have observed Bitcoin prices remaining relatively stable at around $115,018, but caution traders to watch their resistance and support levels closely.
- A large majority of traders, about 90%, are anticipating a 25 basis point cut in POND FED rates tomorrow, while the volatility index reflects growing market uncertainty.
Amid rising tensions in Venezuela, investors are keenly awaiting the Federal Open Market Committee’s decision on interest rates, which will be revealed tomorrow.
There seems to be an ongoing issue between the US and Venezuela. The US recently launched two strikes targeting vessels allegedly involved in drug trafficking. The latest strike, reported on Monday, resulted in three fatalities, while the earlier one on September 2 sank a boat and killed 11 individuals.
In the US context, these vessels are seen as means of transporting drugs like cocaine and fentanyl. Venezuelan President Nicolas Maduro referred to the initial strike as a “heinous crime,” suggesting that President Trump is trying to drag the nation into more significant conflicts.
Bitcoin hasn’t reacted strongly to these developments; it’s still trading slightly up at $115,018, showing a 0.2% gain in the last day. However, it remains about 2.7% lower than earlier this month, according to aggregators like Coingecko.
Analysts from Crypto Exchange Bitunix stress that traders need to keep an eye on any escalation in Venezuela.
They noted there’s a flight towards the US dollar, competing with riskier assets. Investors should monitor international reactions and potential sanctions, with Bitcoin resistance noted between $117,000 and $118,000, and support levels set at $114,000 and $111,000. In light of any sudden changes, it’s advised that traders reduce leverage and manage exposure.
Despite the increased global tensions, users at Myriad, which is under the parent company Dastan, still believe there will be a rate cut approved by the FOMC tomorrow, although optimism is fading regarding the extent of the cut.
A significant 90% of users expect a 25 basis point reduction, whereas the prospect for a 50 basis point cut has diminished—from 30% confidence on September 9 to about 7.4% at present.
The CEM FedWatch tool, which gauges trader sentiment based on interest rate futures, suggests a more pessimistic outlook. Currently, 96% of traders are expecting a 25 basis point cut, leaving only 4% anticipating a larger adjustment.
More generally, it appears that these events involving Venezuelan vessels have caused traders to pause.
The CBOE volatility index, or VIX, has seen a steady increase, reaching 15.66 as of this writing, rising 1.69% over the past five days.
Volatility expectations due to geopolitical conflicts have been accentuated in mobile index measures or Merrill Lynch options, which also showed a 4.79% increase, despite a drop of 8.47% compared to five days prior.
