Bitcoin’s open interest remains below the October 6 peak of nearly $47 billion, when the price reached a record of around $126,080. The current gap indicates potential for further positioning if momentum continues. However, traders keep an eye on liquidation clusters near recent lows, knowing that leverage can unwind rapidly after policy surprises.
Spot demand still crosses over derivatives activity. Investors point to consistently strong exchange-traded fund inflows and a more moderate macroeconomic environment as bullish. If holds above the $112,000 area, technicians are signalling $118,000 to $120,000 as a starting point for a target zone. Cascade effects can be a possibility given the leverage in the system if breaks below near-term support are made.
Risk management remains at the forefront, with the FOMC on the horizon. Tighter stops and lower risk leverage can be used when trading post-decision volatility. Traders will parse the rate decision, the language in the statements, and what Powell says for clues as to how quickly further cuts will occur and when balance sheet changes will take place. Those signals are likely to define the tone for markets into the end of the month.