On August 22, Bitcoin futures experienced a substantial increase in open interest (OI) following the release of the U.S. Federal Reserve’s minutes from its July meeting. The OI reached $31.92 billion, marking an increase of $1.26 billion in 12 hours.
Open interest is the total number of futures and options contracts traded but not yet closed out. Higher OI suggests that traders are more confident about Bitcoin’s price direction, in this case, they expect the Bitcoin price to rise. However, the recent upward move indicates that there is a feeling of bullishness among the traders as the market continues to be divided on the Bitcoin trending upwards or downwards chart.
Information from CoinGlass shows a small margin of long positions compared to short ones as 50.63% of all futures contracts are long positions while 49.37% are short positions. Bitcoin is now trading at around $60,927 since August 9, as per data from CoinMarketCap.
The detailed analysis of the preparatory material for the FOMC meeting was conducted by Markus Thielen, head of research at 10x Research. He has revealed that there might be a high probability of the rate cut in September. Thielen pointed out that most FOMC members thought of a rate cut with some even suggesting it in July.
Crypto Trader Sees Potential Bitcoin Surge Amid Fed Rate Cut Speculation
The particular downward revision in the policy statements or ‘dovish tones,’ featured in the latest FOMC has influenced the BTC market in a positive inclined manner to head towards a bull run. Crypto trader Sykodelic stated that the chances of a higher price for Bitcoin might be caused by the Fed name. Lower interest rates often lead investors to shift from safe-haven investments like bonds to riskier ones, including Bitcoin.
A crypto commentator, Nishant Bhardwaj, anticipates that the fourth quarter can be very active both for US and India domestic markets primarily as a result of the expected Fed rate cut. Thielen expects that further clues may come from the Fed Chair, Jerome Powell’s speech, which may add to this dovish tone and positively influence risky assets including Bitcoin. On the other hand, Caldwell Investment Management’s Justin Elliot voiced his skepticism regarding the future rate cuts expected by the market but provided little evidence to back it up.
