BTC Demand Drops after Presser by Fed, Volatility Increases

The key takeaways

• Bitcoin’s Coinbase Premium went negative following a streak of 62 days.

• BTC remains above $115,000, despite increasing sell pressures and a CVD negative for futures.

Bitcoins (BTCCoinbase Premium Index turned The market has been negative since May 29 after 62 consecutive days of positive trading. The BTC/USD/BTC/USDT price differential between Binance BTC/USDT and Coinbase is often used as an indicator of US spot market demand.

This shift in the market comes after 94 days of positive premiums, making it Bitcoin’s longest period with institutional demand. The flip might indicate a waning interest from US investors, but broader signals show a nuanced market setup.

Onchain Analyst Boris VestBitcoin’s buy/sell taker ratio dropped from 1.2 to 0.9. This indicates that market makers have been selling more. Bitcoin continues to trade above $115,000 despite the aggressive selling. This indicates that passive large buyers are taking over to relieve the pressure. 

The futures funding rates remain neutral, at 0.01, indicating neither a bullish or a bearish dominant trend. This implies that the leverage is in balance and an even larger movement remains possible. 

Vest also pointed out that the CVD of futures continues to indicate persistent sell pressure while causing no major price breakdowns. The divergence in volume and price suggests that there is underlying strength. This may lead to a liquidation-driven move before a sustainable upward movement.

Related: Bitcoin price gained 50% the last time its volatility fell this low

Bitcoin has reached a critical moment

Profit-taking appears to have also slowed down. The Net Actualized Profit/Loss metric (NRPL). shows There is no sign of large scale exits and the adjusted SOPR stays well below the 1,10 threshold that’s usually associated with the tops of the market. The indicators show that investors are confident about the market and not in a hurry to make profits.

This view is further supported by macro conditions. This view is further supported by macro conditions. “Goldilocks” A risky backdrop is favorable. The consumer confidence has also rebounded following a 6-month drop, reflecting an overall recovery in investor mood.

Bitcoin has a neutral status, but the Federal Open Market Committee’s (FOMC’s) next decision could be made. Titan of Crypto, who commented on potential volatility, pointed out the tightening Bollinger Bands, an indicator technical that measures volatility. This compression often indicates that there is a break or major breakdown imminent. The analyst said, 

“Bitcoin in a pressure cooker. Bollinger Bands are squeezing = volatility is drying up. RSI is compressing too. A big move is brewing.”

Related: Bitcoin bulls aim to chase liquidity at $122K, but Q3 seasonality could stall breakouts

This article contains no investment recommendations or advice. Each investment or trading decision involves some risk. Readers should do their own research before making any decisions.