Ahead of the all-important Federal Reserve FOMC meeting in November 2022, which will decide on interest rates, Bitcoin derivatives are showing some important information. It is widely believed that the meeting will result in a 0.75% interest rate hike, followed by a 0.50% increase in December.
Against this backdrop, it remains to be seen how the bitcoin price would react after the decision was announced. Yet on Wednesday, BTC largely displayed a sideways movement, in a potential anticipation of the bullish momentum.
FOMC Decision on Bitcoin – Derivatives
As the market prepares for the Fed’s announcement, the Bitcoin whales seem to be involved in the influx of assets into the exchanges. According to data on the Crypto Quant blockchain, open interest in the derivatives market has been decreasing lately. Interestingly, this trend has coincided with bitcoin hitting a monthly high of around $21,000. Overall, there is strong selling pressure for bitcoin and Ethereum ahead of the FOMC meeting.
“As the price of bitcoin rises, open interest in the derivatives market has declined, signaling that traders have closed their long bets.”
Meanwhile, stablecoins are flowing into trading in high volumes. This could be a positive indication for BTC’s long-term prospects. At the time of writing, the price of BTC stands at $20,481, up 0.31% over the past 24 hours, according to price tracking platform CoinMarketCap. Ethereum is priced at $1,567, down 0.29% in the past 24 hours.
US-based traders continue to accumulate BTC
We also see that U.S.-based crypto-currency traders have continued to buy bitcoins lately. Despite several headwinds, traders in the U.S. have been accumulating bitcoin since July, more than anywhere else. “Since July 28, 2022, the main interest has come from U.S. traders trying to accumulate BTC.“
With this in mind, the movement of the BTC price could go either way after the Fed rate announcement. In the recent past, there have been times when the price of BTC has dipped a bit before the announcement, followed by a sharp rise in all cryptocurrencies.