The important Fed FOMC meeting in November 2022, which decides the interest rate, is fast approaching. Bitcoin derivatives offer some valuable insights. The meeting is expected to result in a 0.75% increase in interest rates, followed by a 0.50% increase in December. It remains to be seen what Bitcoin’s (BTC) prices will do in this setting. BTC traded in sideways on Wednesday as a sign of potential bullish momentum.
Bitcoin FOMC Decision – The Derivatives
Bitcoin whales are involved in the inflow of assets to exchanges as the market prepares for Fed announcement. According to on Chain Data from Crypto Quant the open interest in the derivatives market has declined in recent years. This pattern coincided with Bitcoin hitting a monthly high of approximately $21,000. Both Bitcoin and Ethereum are under high selling pressure ahead of the FOMC meeting.
“As bitcoin prices rise, open interest in the derivatives market has fallen, signaling that traders are closing their long bets.”
In the meantime, large volumes of stablecoins flow into exchanges. This could indicate that BTC’s long-term prospects are good. According to price tracking platform CoinMarketCap, BTC’s price is currently at $20,481, an increase of 0.31% over the past 24 hours. The Ethereum price is at $1,567. This is a drop of 0.29% over the past 24 hours.
U.S.-based traders continue to accumulate BTC
In recent years, it has been found that U.S. crypto traders have continued to buy Bitcoin. Despite many headwinds, traders in the U.S. have accumulated Bitcoin more than any other country since July 2018. The main interest in Bitcoin has been from U.S. traders since July 28, 2022.
This means that BTC prices could move in any direction after the Fed rate announcement. There have been instances in the past when BTC prices dropped a little before an announcement was made. This was followed by sharp increases in all cryptocurrencies.