Bitcoin Bulls Take Long Positions Ahead of FOMC Decision

Bitcoin bulls are actively taking long positions ahead of the Federal Open Market Committee (FOMC) interest rate decision scheduled for May 7. Data indicates that these bulls are opening margin long positions around the $94,400 mark, signaling a strong bullish sentiment in the market. This move is supported by a significant increase in Bitcoin futures open interest, which has risen by approximately $189 million, along with a 15% increase in trading volume. These figures suggest sustained buying interest despite recent price fluctuations.

Analysts have noted that Bitcoin's price momentum tends to slow down before FOMC meetings, followed by a period of increased volatility. This pattern was observed in the past five interest rate decisions, where Bitcoin's price experienced a sharp increase in volatility after the meetings. The current trend shows that Bitcoin's 25-day rate of change (ROC) has been on an uptrend, which historically correlates with price gains. However, when the ROC tapers off, Bitcoin tends to correct, as seen in January-February 2025. The upcoming FOMC meeting is expected to be a potential catalyst for Bitcoin's next move, with the rate decision and Federal Reserve Chair Jerome Powell's tone likely to influence market volatility.

Despite the recent price dip, the aggregated funding rate remains near neutral, indicating a balanced sentiment between long and short positions over the past eight hours. However, funding rates have shown brief spikes, reaching 0.018% on May 6, suggesting periodic optimism among leveraged traders. This optimism is further supported by analysts who predict that Bitcoin could continue to recover in the markets, with the key factor being whether gold starts to correct after the FOMC meeting, indicating the start of a new business cycle.

Overall, the market is anticipating the FOMC decision with a mix of caution and optimism. The sustained buying interest and the historical pattern of increased volatility after FOMC meetings suggest that Bitcoin's price could experience significant movements in the coming days. Investors are advised to conduct their own research and consider the potential risks before making any investment decisions.