Bitcoin Traders Gear Up Before Fed Decision
Bitcoin traders are increasing their leveraged positions across crypto markets ahead of this week’s U.S. Federal Reserve (Fed) meeting, where investors expect another interest rate cut.
The Fed will announce its rate decision on Wednesday, and most analysts predict a 0.25% (quarter-point) cut. This move could boost investor appetite for risk assets, including cryptocurrencies like Bitcoin.
Recent U.S. economic data supports this expectation. Reports from July and August showed a weaker job market and lower core inflation, which led the Fed to cut rates last month. The ongoing U.S. government shutdown has also limited access to new economic data, but Fed Chair Jerome Powell recently hinted at ending quantitative tightening, signaling a softer policy stance.
Prediction market Myriad (owned by Decrypt’s parent company Dastan) shows a 92.6% chance of another 0.25% cut this week.
Bitcoin Activity Heats Up
Optimism about easier Fed policy is already visible in the crypto market. Data from CryptoQuant shows Bitcoin’s open interest—the total value of active futures and derivatives positions—has climbed to $37.63 billion, up from $33 billion last week.
During the same period, Bitcoin’s price rose from $107,600 to just above $116,000.
However, open interest still sits below its October 6 peak of $47 billion, when Bitcoin hit an all-time high of $126,080 (CoinGecko data). Some analysts believe this means much of the bullish momentum may already be priced in.
What Analysts Say
“Markets expect the Fed to cut rates by 25 basis points to around 4.00–4.25%, and that expectation is already reflected in prices,” said Gracy Chen, CEO of Bitget.
Despite the government shutdown, Chen expects the Fed to stick with its plan since monetary policy operates separately from Congress. She added that Powell is likely to signal a gradual easing cycle, which could expand liquidity and support risk assets like crypto.
“Bitcoin’s rebound over the weekend shows improving sentiment,” Chen said. “If Bitcoin stays above $112,000, it could target $118,000–$120,000 by the end of the month. Rising open interest near $40 billion also shows growing trader confidence.”
However, Chen warned that high leverage could still trigger sharp price swings in the days ahead.
