Key takeaways:
Bitcoin futures open interest fell $2 billion in five days, signaling cautious futures traders.
Binance taker volume averages cycle lows as the market waits for Fed’s interest rate decision.
The Coinbase premium suggests steady US demand defending $115,000.
Bitcoin (BTC) traders appear to be scaling back exposure ahead of the US Federal Reserve’s policy decision this week, with onchain and derivatives data showing a notable reduction in leverage alongside signs of steady buying demand around the $115,000 mark.
Bitcoin open interest has slipped by $2 billion since last Friday, dropping below $40 billion from $42 billion. The decline comes after Bitcoin briefly peaked near $116,700 on Monday. Alongside this, aggregate futures volume has been negligible, suggesting a lack of aggressive positioning in either direction as futures traders remain cautious.
The funding rate, a measure of the cost of holding positions in perpetual futures, is also on a downward trajectory. Notably, the London session on Tuesday saw the sharpest hourly funding spike since August 14, a move that back then coincided with a local top.
According to crypto analyst Maartunn, hourly net taker volume on Binance has fallen below $50 million, well below the typical $150 million average. Such subdued activity points to a sidelined market, with participants waiting for clarity from the Fed before fresh capital positions.
Related: Bitcoin faces resistance at $118K, but ETFs may push BTC price higher
Coinbase premium signals strong demand at $115,000
While derivatives traders step back, spot demand on Coinbase is telling a different story. The Coinbase premium, the price difference between Bitcoin on Coinbase and other exchanges, has been steadily rising since last Tuesday. This trend reflects robust US investor demand, with the current buying cluster the strongest since early August. The flows suggest that buyers are actively defending the $115,000 level.
Broader sentiment indicators also reflect this balance between caution and quiet confidence. The Bitcoin Bull Score, which tracks shifts in market momentum, has rebounded to a “neutral” 50 from a “bearish” reading of 20 over the past four days. This suggests that selling pressure is easing, with the market entering a more balanced phase ahead of the Fed announcement.
Meanwhile, the Bitcoin Risk Index, tracked by analyst Axel Adler Jr., sits at 23%, near cycle lows. The metric gauges the relative danger of sharp pullbacks compared to the past three years.
Adler notes that low readings correspond to “calmer environments” with a reduced likelihood of rapid liquidations. A similar setup last occurred between September and December 2023, when Bitcoin traded steadily before entering a new uptrend.
Related: Bitcoin price drop to $113K might be the last big discount before new highs: Here’s why
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
