BTC demand drops after Fed presser; volatility increases

The key takeaways

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

• BTC is still above $115,000 in spite of rising selling pressure and negative CVD futures.

Bitcoin) (BTCCoinbase Premium Index turned For the first time in 62 days, Bitcoin has turned negative. This metric is used to measure US spot demand. It tracks the difference in price between Binance and Coinbase BTC/USD pairs.

This shift in the market comes after a longer run, 94 days of positive premiums. It is Bitcoin’s longest period with sustained institutional demand. Although the market’s flip could indicate that US buyers are losing interest, other signals in the markets suggest something more complex.

Onchain Analyst Boris VestBitcoin’s ratio of taker buyers to sellers has fallen from 1 to 0, indicating a rise in selling by market-makers. Bitcoin price remains above $115,000 even with aggressive sell-side behavior. It is a sign that large passive buyers have stepped in to take 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 highlighted the fact that futures’ CVD (cumulative volume delta) is continuing to show persistent selling pressure, without any significant breakdown in prices. The divergence in volume and price suggests that there is underlying strength. This may lead to a liquidation-driven move before the next sustainable uptrend.

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

Bitcoin at a Crossroads Moment

There are also signs of profit-taking slowing down. The Net Realized Loss (NRPL), a metric that measures the net realized profit/loss. shows No evidence that large-scale withdrawals have occurred, and the SOPR Adjusted remains below the threshold of 1,10 typically associated with tops in the markets. The indicators show that investors are confident about the market and not in a hurry to make profits.

The macro-economic conditions also support this opinion. US Job Openings and Labor Turnover Survey report (JOLTS), released on Tuesday, came out slightly lower than anticipated. This reinforces a “Goldilocks” A risky backdrop is favorable. The consumer confidence has also rebounded following a 6-month drop, reflecting the recovery of investor sentiment.

Bitcoin has a neutral status, but the Federal Open Market Committee’s (FOMC) next meeting could be decisive. Titan of Crypto commented that the Bollinger Bands were tightening, which is a technical indicator used to measure volatility. These bands often compress when a significant breakout or breakdown nears. 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

The information in this article is neither investment advice nor a recommendation. Each investment or trading decision involves some risk. Readers should do their own research before making any decisions.