Ahead of the previous FOMC meeting, Bitcoin staged a rebound on expectations of rate cuts. During the same period, however, open interest declined, creating a clear divergence. This suggests that the rally was driven primarily by spot demand rather than derivatives positioning. The episode once again highlights that a sustainable uptrend in Bitcoin typically requires not only stronger spot demand but also a simultaneous expansion in open interest.
Against this backdrop, Bitcoin’s price declined yesterday while open interest increased. Alongside rising funding rates, this indicates that traders continued to add long exposure even as prices moved lower. When open interest rises during a price pullback, it signals growing risk appetite and an increase in speculative positioning despite unfavorable price action. If this pattern persists, it may serve as an early indication of a potential short-term trend reversal.
That said, the market is heading into a week packed with major macroeconomic events, including U.S. Non-Farm Payrolls, the unemployment rate, CPI, PCE, and the Bank of Japan’s policy decision. In this environment, macroeconomic data releases are likely to have a greater influence on short-term market volatility than Bitcoin’s internal market metrics. Ultimately, the direction of Bitcoin and broader risk assets will depend on whether expectations for U.S. rate cuts remain intact or begin to weaken.
Written by MAC_D
