Get ready for volatility as Bitcoins open interest reaches record levels before FOMC meeting
Amidst a period of heightened speculation, the demand for Bitcoin (
BTC
) is on the rise, with open interest in the derivatives market reaching historical highs during a volatile week in the cryptocurrency market. Traders are gearing up for increased volatility leading up to the FOMC meeting scheduled for June 12, as they make their moves in the crypto space.
Open interest (OI) is a key metric that measures the number of active long and short positions in the market. Traders are actively leveraging their positions in search of the best risk-reward ratio, which can lead to significant price swings in Bitcoin through liquidations.
When open interest is high, it indicates a greater likelihood of aggressive market moves as positions have a stronger impact on the overall market sentiment. Renowned crypto trader and analyst, Ali Martinez, reported a record $18.75 billion in open interest for Bitcoin, signaling strong momentum and the potential for increased volatility.
In anticipation of the FOMC meeting, analysts are already bracing for a week filled with market turbulence. These meetings have historically had a significant impact on Bitcoin’s price, leading to spikes in volatility and heightened open interest. Martinez noted that Bitcoin typically sees a rebound following these meetings, with the current price sitting at $67,114. If history repeats itself, we could see Bitcoin reaching $73,000 in the near future.
Experts, including ChatGPT-4o, have predicted that Bitcoin’s price could range between $70,000 and $73,000 in a neutral outcome scenario surrounding the interest rate decision. However, if a bullish sentiment prevails, Bitcoin could surpass $75,000, setting new records for the leading cryptocurrency. Investors are advised to exercise caution during the FOMC meeting as other cryptocurrencies are likely to follow Bitcoin’s lead.
Disclaimer: The information provided in this article should not be construed as investment advice. Investing in cryptocurrencies carries inherent risks, and investors should be mindful of potential losses.
