Bitcoin Traders Reduce Leverage by $2B Before Fed Decision
Bitcoin Traders Scale Back Exposure Ahead of Fed Rate Decision
Bitcoin (BTC) traders are reducing their positions before the U.S. Federal Reserve's upcoming policy announcement. On-chain data reveals reduced leverage and sustained buying interest around the $115,000 price point.
Derivatives Market Shows Caution
- Open Interest Decline: Bitcoin futures open interest has decreased by $2 billion in the last five days, falling from $42 billion to below $40 billion.
- Low Trading Volume: Aggregate futures volume is low, indicating a lack of aggressive positions as traders await clarity from the Fed.
- Funding Rate Downward Trend: Funding rates, which reflect the cost of holding perpetual futures positions, are declining.
Binance Taker Volume Suggests Sideline Market
Crypto analyst Maartunn notes that hourly net taker volume on Binance has dropped below $50 million, significantly lower than the typical $150 million average. This suggests that market participants are waiting for the Federal Reserve's decision before committing new capital.
Coinbase Premium Indicates Steady U.S. Demand at $115,000
Despite the caution in the derivatives market, spot demand on Coinbase remains strong. The Coinbase premium, which measures the price difference between Bitcoin on Coinbase and other exchanges, has been steadily increasing. This suggests strong U.S. investor demand, defending the $115,000 level.
Market Sentiment Balances Caution and Confidence
The Bitcoin Bull Score has rebounded to a neutral 50, indicating easing selling pressure. The Bitcoin Risk Index, which gauges the likelihood of pullbacks, is at 23%, near cycle lows, suggesting a calmer market environment with reduced liquidation risk.
