BTC Demand Drops after Presser by Fed, Volatility Increases

The key takeaways

• Bitcoin’s Coinbase Premium went negative following a 62 day buying spree.

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

Bitcoins (BTCCoinbase Premium Index turned For the first time in 62 days, Bitcoin has turned negative. 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 fading interest from US investors, but broader signals show a nuanced market setup.

The onchain analyst Boris VestBitcoin’s ratio of takers to sellers has decreased from 1.4 to just 0.9. Market makers have been selling at a higher rate. 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. 

While the rate of futures financing remains at 0,01, it does not show a bullish or a bearish dominant, indicating that the leverage is equal and there are still larger moves to come. 

Vest added that CVD, the cumulative volume delta for futures contracts continues to indicate persistent sell pressure while not causing major price breakdowns. Volume and price divergence suggests strength at the underlying level and could set up a shakeout driven by liquidity before any upward trend.

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. Net realized loss (NRPL) is a measure of profit/loss. 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 top of the market. 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. 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) next meeting could be decisive. Titan of Crypto commented that the Bollinger Bands were tightening, which is a technical indicator used to measure volatility. This compression often indicates that there is a break or 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. Risk is inherent in every investment decision and trade. The reader should always do research prior to making a final decision.