Bitcoin's ATH depends on three conditions after the rate cut
The US Federal Reserve cut interest rates for the first time in nine months. Will Bitcoin's price now be able to surpass its previous all-time high of $123,000?
Analysts believe the next two weeks will be decisive for price dynamics. They predict a new all-time high if futures premiums remain positive and open interest rises during this period.
The futures market goes 'Risk On'
On Wednesday, the Federal Open Market Committee (FOMC) cut the federal funds rate by 25 basis points to 4.00–4.25%. Most policymakers supported the decision. According to the Fed, another 50 basis points are likely to be cut by the end of the year.
The crypto market responded strongly. XWIN Research Japan, an analyst at on-chain analytics platform CryptoQuant, noted that open interest in Bitcoin futures turned positive for the first time in three days.
Bitcoin: Open Interest by Exchange. Source: CryptoQuant
The latest data shows an increase in long positions on major exchanges. Binance leads the way with an increase of $166 million, followed by OKX with an increase of $131 million.
The analyst noted that risk appetite has increased in the derivatives market. He explained that when interest rates fall, demand for assets like Bitcoin typically increases.
Constant futures premium and OI growth are key factors
Axel Adler Jr., another analyst, emphasized the importance of the next two weeks. He noted that BTC futures are trading at a premium to spot prices, and the fundamentals remain positive. He added that the seven-day fundamental exceeds the 30-day fundamental, creating a bullish market sentiment.
Bitcoin: Futures-Spot %. Source: CryptoQuant
Adler Jr. predicts a 70% chance that the Bitcoin price will rise or remain stable over the next two weeks. He believes it's important for the price not to fall during this period, and for futures to remain above spot prices.
Additionally, if the open interest volume increases, it will also increase the chances of reaching a new ATH.
Source: cryptonews.net
