Bitcoin Holds $108,000 as Traders Await Central Bank Policy Shifts

Bitcoin has been trading in a narrow range around $108,000 as the market prepares for a pivotal week of macroeconomic events. Traders are focusing on the European Central Bank’s annual policy forum in Sintra and Federal Reserve Chair Jerome Powell’s appearance on Tuesday. The price action has been relatively muted, but signals from derivatives and on-chain markets suggest that volatility may soon return. Traders are closely monitoring shifts in central bank rhetoric that could influence risk appetite across both crypto and traditional markets.

According to Axel Adler Jr., an independent on-chain analyst, whales are aggressively moving large volumes onto centralized exchanges. This pattern, combined with declining exchange reserves and weakening stablecoin inflows, typically precedes periods of elevated volatility. Adler notes that as long as Bitcoin holds above $108,000, the base scenario is upward movement with targets at $112,000.

The backdrop comes as Powell is expected to reiterate the Fed’s cautious stance on interest rates, citing the need for more clarity on inflation and labor markets before easing begins. The ECB Forum, themed “Adapting to change,” will feature Powell alongside ECB President Christine Lagarde and other central bankers as they address how policy is evolving in a fragile economic landscape.

Even before the Sintra forum, derivatives traders have begun positioning around the volatility pivot. On Saturday, Cole Kennelly, founder of Volmex Finance, pointed to a sharp increase in trading volume for synthetic Ethereum and Bitcoin volatility index perpetuals on gTrade. This suggests growing demand for exposure to directional volatility as markets await policy cues.

Bitcoin options activity reflects that caution. About 20% of open interest on Derive is clustered around downside puts, highlighting positions at $85,000, $100,000, and $106,000 strikes. This indicates that Bitcoin traders are cautious, hedging against risks tied to the macroeconomic backdrop as they cluster around lower strike puts.

In contrast, Ethereum markets are leaning bullish, with elevated call activity at $2,900 and $3,200. This positioning seems to be driven by anticipation of ETHCC in Cannes—a major event historically associated with product announcements and ecosystem growth. Traders are clearly expecting catalysts that could drive upward momentum.

The market's anticipation of central bank policy shifts is evident in the cautious positioning of Bitcoin traders. As the ECB Forum and Powell’s appearance approach, the potential for volatility in both crypto and traditional markets is high. Traders are bracing for macro uncertainty or post-rally profit-taking, reflecting the broader economic landscape's fragility.