Before the previous FOMC meeting, Bitcoin recovered on expectations of rate cuts. However, during the same period, open interests declined, creating a clear divergence. This indicates that the rally was mainly driven by spot demand rather than derivatives positioning. This episode again emphasizes that a sustainable upward trend in Bitcoin usually requires not only greater spot demand but also a simultaneous expansion of open interests.
Against this backdrop, the price of Bitcoin fell yesterday, while open interests increased. Along with the rise in financial rates, this indicates that traders continued to add long exposure even as prices declined. When open interests rise during a price drop, it signals an increasing appetite for risk and a buildup of speculative positions despite unfavorable price dynamics. If this pattern persists, it could serve as early evidence of a potential short-term trend reversal.
Having said that, the market is preparing for a week filled with major macroeconomic events, including non-farm payrolls in the U.S., unemployment rate, Consumer Price Index (CPI), Personal Consumption Expenditures (PCE) index, and the Bank of Japan's policy decisions. In this situation, the publication of macroeconomic data is likely to have a greater impact on short-term market volatility than internal market metrics for Bitcoin. Ultimately, the direction of Bitcoin and broader risk assets will depend on whether expectations for rate cuts in the U.S. remain unchanged or begin to weaken.
News is for reference and not investment advice. Please read carefully before making decisions.
