Bitcoin ATH Depends on These Three Preconditions After Rate Cut
The US Federal Reserve has cut interest rates for the first time in nine months. Can Bitcoin’s price now break its previous all-time high of $123,000?
On-chain analysts predict the next two weeks will be crucial for price action, saying a new all-time high is likely if futures premiums remain positive and open interest increases during this period.
Futures Market Flips to ‘Risk On’
On Wednesday, the Fed’s Federal Open Market Committee (FOMC) lowered the US federal funds rate by 25 basis points to 4.00–4.25%. The majority of policymakers supported the cut. According to the Fed’s dot plot, an additional 50 basis points will likely be cut by the end of the year.
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The crypto market responded proactively. XWIN Research Japan, an analyst at the on-chain data platform CryptoQuant, explained that Bitcoin’s future open interest has turned positive for the first time in three days.
Recent data shows a surge in long positions across major exchanges. Binance leads the way with a positive change of +$166 million, followed by OKX with +$131 million.
The analyst noted that derivatives sentiment has clearly shifted to favor risk-taking. He explained that when interest rates fall, demand tends to increase for non-yield-bearing assets like Bitcoin.
Sustained Futures Premium And Rising OI Are the Key
Another analyst, Axel Adler Jr., stressed the importance of the next two weeks. He pointed out that BTC futures are trading at a premium to spot prices, with the basis consistently positive. He added that the 7-day basis is exceeding the 30-day basis, creating a bullish market atmosphere.
Adler Jr. predicts that there is a 70% chance that Bitcoin’s price will see a gradual upward trend or consolidation over the next two weeks. He states that it’s crucial for the price not to fall during this period and for futures prices to stay above spot prices.
Additionally, if the open interest volume increases, he believes the probability of a new all-time high will be high. A break above the all-time high (ATH) is increasingly likely if this scenario plays out.
