Bitcoin Market Analysis: Fed Rates, Open Interest Trends, and Short Squeeze Forecast

Onchain analytics platform CryptoQuant has highlighted new bullish signals for Bitcoin following the Federal Reserve’s decision to hold interest rates, a development repeated a second consecutive time.

Fed Policy Seen as Positive for BTC

CryptoQuant suggests the Fed’s rate pause, perceived by markets earlier this year as a shift occurring mainly in the third quarter, could provide tailwinds for the world’s leading cryptocurrency, particularly given historical tendencies.

“Following the Federal Reserve’s decision to hold interest rates steady during its most recent policy meeting, the Bitcoin market has shown a complex set of signals, especially on Binance,” the platform’s contributor Amr Taha noted.

BTC Price vs. Open Interest Divergence

Taha identified a divergence between BTC’s price action and Binance’s open interest. According to the analysis, Bitcoin has formed “consistent equal lows slightly above $104,000,” acting as a strong demand zone.

“However, in contrast, the open interest on Binance has recorded a series of lower lows,” the analysis stated, pointing to what it describes as “progressive deleveraging across the derivatives market.”

Potential Short Squeeze

Market analysis also points to increasing potential for a short squeeze via the $106,000 price level. CoinGlass data indicates accumulating ask liquidity concentrated near this area.

“The odds of a short squeeze are increasing, with ask liquidity stacking around the $106,000 mark,” observed CoinGlass.

This view draws parallels with CoinGlass’s own liquidation data and risk index analysis, which pointed to “high leverage liquidity” in short positions, broadly labeled as presenting “SO JUICY” targets for short covering.

Disclaimer

This analysis is intended for informational purposes only and does not constitute investment advice. Every investment and trading move involves risk, and readers are encouraged to conduct their own research.