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Brace for volatility: Bitcoin open interest at all-time high ahead of FOMC meeting

Brace for volatility: Bitcoin open interest at all-time high ahead of FOMC meeting

Speculative demand for Bitcoin (BTC) is surging, and derivatives market open interest returns to historical highs in a volatile week. The cryptocurrency market expects increased volatility ahead of the FOMC meeting on June 12 while crypto traders place their bets.

Essentially, the open interest (OI) measures the volume of long and short positions currently active and open. Volatility strikes while traders leverage their positions, seeking the highest risk-reward ratio, aggressively moving the Bitcoin price through liquidations.

The higher the open interest, the higher the likelihood of more aggressive moves as positions exert increased influence on the spot market.

On that note, crypto trader and analyst Ali Martinez reported $18.75 billion OI for Bitcoin, at its all-time high. According to him, this indicates strong momentum and signals incoming volatility.

“Bitcoin open interest is hovering around all-time highs, at $18.752 billion! This signals increased trading activity, strong BTC market sentiment, and potential for higher volatility.”

– Ali Martinez
Bitcoin Open Interest – All Exchanges, All Symbols. Source: CryptoQuant / Ali Martinez

Bitcoin price analysis and the FOMC meeting’s volatility

Interestingly, market analysts already expected a volatile week ahead of the Federal Open Market Committee (FOMC) meeting to decide on the Federal Reserve interest rate target. These meetings have had a historical impact on Bitcoin’s price, always bringing volatility and higher open interest.

In another post on X, Martinez highlighted that BTC usually rebounds after every FOMC meeting. As of this writing, Bitcoin trades at $67,114, and a rebound could drive it to $73,000 if the pattern plays out.

Notably, Finbold asked ChatGPT-4o for a Bitcoin price prediction in the interest rate decision context. As reported on June 9, BTC could trade between $70,000 and $73,000 within a neutral outcome.

However, a bullish outlook could drive it above $75,000, making new highs for the leading cryptocurrency. Other cryptocurrencies will likely follow the leader, and investors must be extremely cautious during the FOMC meeting hours.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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