.png){kind=logo}
Bitcoin price has climbed up to $116,000 at the time of writing, leading to a spike in leveraged positions across major derivatives platforms. Aggregated open interest climbed to roughly $37.6 billion, according to industry trackers, as traders prepared for the Federal Reserve’s decision on Wednesday. Rising open interest alongside higher prices signals active positioning into the event.
Futures and perpetual swaps experienced new inflows as traders sought directional exposure. Many chose the higher leverage, which can yield greater gains but also increase losses in the event of sharp market moves. Market depth improved from last week's levels; however, leverage measures indicate a high sensitivity to headlines and policy guidance.
The latest rally followed Bitcoin’s move from near $107,600 to nearly $116,000. That rise coincided with the expansion of open interest from approximately $33 billion. Analysts note that participation broadened across venues, with funding rates firm but not extreme. This balance suggests traders expect volatility but still watch key resistance zones.
Traders widely expect a 25-basis-point reduction after the Fed’s first cut last month. A softer labor market in July and August, along with lower core inflation, helped shape that view. The ongoing US government shutdown has restricted access to fresh data, leading markets to rely more on recent Fed communications for directional cues.
Chair Jerome Powell also signaled a possible end to quantitative tightening, which traders see as a sign of potentially looser financial conditions. A gradual Fed rate cut may support risk assets, including cryptocurrencies, as long as concerns about growth remain limited. Options markets show these expectations, with skew stabilizing and implied volatility rising only slightly.
Prediction platforms also show strong confidence in a cut this week. One market tracked a probability near 92.6% for a quarter-point move. That confidence helped establish a constructive tone across digital assets, even as some participants caution that optimism may already be reflected in prices.
Also Read: Bitcoin Price Trades Near $115,000 as Investors Await Next Big Move
Bitcoin’s open interest remains below the October 6 peak of nearly $47 billion, when the price reached a record of around $126,080. The current gap indicates potential for further positioning if momentum continues. However, traders keep an eye on liquidation clusters near recent lows, knowing that leverage can unwind rapidly after policy surprises.
Spot demand still crosses over derivatives activity. Investors point to consistently strong exchange-traded fund inflows and a more moderate macroeconomic environment as bullish. If Bitcoin price holds above the $112,000 area, technicians are signalling $118,000 to $120,000 as a starting point for a target zone. Cascade effects can be a possibility given the leverage in the system if breaks below near-term support are made.
Risk management remains at the forefront, with the FOMC on the horizon. Tighter stops and lower risk leverage can be used when trading post-decision volatility. Traders will parse the rate decision, the language in the statements, and what Powell says for clues as to how quickly further cuts will occur and when balance sheet changes will take place. Those signals are likely to define the tone for crypto markets into the end of the month.
