The crypto market remained largely in a wait-and-see mode ahead of the Federal Reserve's interest rate decision. Bitcoin rebounded above $64,000 after two days of significant volatility, but futures and options data suggest that traders have yet to reach a consensus.
Bitcoin rebounds but direction remains unclear.
As of press time, Bitcoin was up 0.75% to $64,328, recovering some of the previous day's losses. In the previous 48 hours, Bitcoin had fallen from $66,700 last week to $62,400, showing significantly increased volatility.
Ethereum fell slightly by 0.13% on the day. The CoinDesk 20 index rose 0.41% since midnight UTC, with 10 of the 20 constituent tokens rising and 10 falling, indicating that the market as a whole still lacks a clear direction.
Traditional markets are showing a similar pattern. S&P 500 and Nasdaq 100 futures rose slightly, gold remained above $4,000, and silver rose 1.40%. This performance is more akin to defensive hedging than a significant rebound in risk appetite.
Expectations of interest rate hikes have not subsided.
With current US inflation at 4.1%, the Federal Reserve has not ruled out raising interest rates. If this rate hike occurs, it will be the first in three years.
However, the temporary easing of tensions between Iran and the United States has reduced pressure on oil prices and slightly cooled market bets on this interest rate hike. The article notes that traders still give about a 35% probability of a rate hike, meaning that a clear consensus has not yet formed in the market before the decision.
Limited changes in futures open interest
Derivatives data reflects a clear wait-and-see attitude. The long-short ratio of active buying and selling in the crypto market is close to balanced, and the open interest has remained relatively stable at around $113 billion in the past 24 hours, but trading volume increased by 10% to $205 billion.
This indicates that market trading activity has increased somewhat, but there is no significant increase in new directional bets. The rebound in spot prices has not yet significantly boosted participation in futures markets.
- BTC open interest remains at approximately 750,000 BTC.
- ETH open interest declined for the fourth consecutive day, falling to 14.14 million ETH.
- Most of the top 20 token holdings remained flat or declined.
UNI is one of the few exceptions. Its open interest rose to 68.53 million tokens, the highest since July 13, roughly corresponding to a 5% increase in the token price. The article links this performance to BlackRock's move to introduce its tokenized US Treasury fund to decentralized exchanges.
The options market is defensive.
Looking at the CVD data after 24-hour position adjustments, there is a divergence in signals among different tokens. ADA, TRX, XRP, UNI, and ETH tend to be actively long, while other tokens show the opposite characteristics.
Meanwhile, the 30-day implied volatility of Bitcoin and Ethereum remains at recent lows, indicating that the options market has not fully priced in expectations of significant short-term volatility. This is not entirely consistent with analysts' concerns about uncertainty ahead of the Fed's decision.
In the Deribit options market, put options with strike prices of $62,000, $60,000, and $54,000 were the most actively traded, indicating that some funds are still protecting against downside risk. For Ethereum, call options were the most actively traded.
Altcoins show mixed performance
Altcoins showed mixed performance. XRP rose 1.72% to $1.086, while ADA rose 1.48%, both continuing their recovery from their July lows.
In the DeFi sector, Jupiter (JUP) rose 5.79%, becoming one of the best-performing tokens in the past 24 hours, and has recorded gains in three of the past four days. In contrast, the AI token FET continued its decline, falling 4.60% intraday, with a 6.78% drop in the past 24 hours, and a cumulative decline of nearly 14% over the past week.
In addition, PUMP fell 5.14%, giving back most of last week's speculative gains; while privacy coin Monero (XMR) bucked the trend, rising 1.82% to $347, continuing its recent relatively strong performance.
