Investors are advised to be cautious as open interest in Bitcoin futures indicates a growing sense of greed.
Considers Raising Interest Rates
According to reports, the Federal Reserve officials are considering another rate hike before the end of the year. While there are differing opinions, all members agree on the importance of maintaining higher interest rates until inflation reaches the desired annual rate of 2%.
The summary of the September policy meeting states that a majority of participants believe that another increase in the target federal funds rate would likely be appropriate, while some believe that no further increases would be necessary.
If the Fed decides to tighten monetary policy further, it could impact both the stock market and the cryptocurrency market. On Thursday, the U.S. Labor Department will release the Consumer Price Index (CPI) data, which will provide more clarity on the Fed’s future actions.
The broader crypto market has faced pressure, leading to a decline in the price of Bitcoin below $27,000. Currently, Bitcoin is trading at $26,828, down 1.07%, with a market cap of $523 billion.
Hint Caution: Bitcoin Futures Open Interest
Santiment, an on-chain analytics platform, suggests that the increasing number of outstanding Bitcoin futures and options may be contributing to the relatively subdued performance of the cryptocurrency market in October. When Bitcoin’s open interest exceeds $7 billion historically, it often indicates investor greed, but currently, it stands at $6.19 billion.
🤑 The growing amount of outstanding futures & options toward #Bitcoin may be lending to #crypto‘s failure to launch here in October. Rising open interest, particularly when $BTC starts seeing $7B or more, often signals greed. For now, it sits at $6.19B. https://t.co/DHSaJGvQtI pic.twitter.com/zkE6qbDjN9
— Santiment (@santimentfeed) October 11, 2023
Altcoin Sherpa, a crypto analyst, compares the current state of Bitcoin to a period of significant volatility in 2019, lacking a clear breakout. Similar to that time, Bitcoin’s price fluctuated above and below the 200-day EMA, accompanied by sporadic price spikes. Altcoin Sherpa predicts that exciting times may occur in 2024-2025 and advises investors to hold on until then.
The focus will be on macro data this week, which can provide better clarity for the future.