Bitcoin Open Interest Spikes 3.4% Amid Rate Cut Anticipation

Bitcoin’s price has been in a state of sideways consolidation, reflecting a cautious optimism among long-term holders. This phase of quiet stacking could be the calm before the next major breakout. At the time of reporting, Bitcoin seemed to be stuck in a “neutral” zone, neither falling apart nor breaking out significantly. The market sentiment is fragile, with assumptions about potential Federal Reserve rate cuts and geopolitical tensions driving the narrative.

Bitcoin’s Open Interest (OI) spiked by 3.4%, indicating that fresh leverage may be returning to the market. This is a bold move, especially considering the two major long liquidations that occurred in June, which derailed any real recovery attempts. However, a trader with a perfect 29-for-29 trade record recently opened a $29 million long position on BTC, suggesting that there might be underlying factors not yet priced into the market.

As of mid-2025, the Federal Reserve has not cut rates once. The recent FOMC meeting maintained a no-cut stance, resulting in minimal volatility for Bitcoin, which slipped only 0.24% that day. However, Jerome Powell’s remarks hinted at the possibility of rate cuts later in the year, a key signal for traders and investors. This anticipation of potential easing in the second half of 2025 may be contributing to Bitcoin’s current sideways action, which could be setting the stage for a significant rally.

On-chain data shows a clear disconnect between Bitcoin’s price and its on-chain activity. Since early 2025, daily transactions have decreased to 320k–500k from a peak of 734k in 2024. However, the network has been moving about $7.5 billion a day, with each transaction averaging $36.2k, indicating that big players are staying active. Transactions over $100k make up 89% of the total volume, up from 66% in late 2022, suggesting that smaller transfers are fading fast. This trend indicates that smart money is either accumulating or holding through the volatility, “buying into the fear” as rate cut expectations build.

According to a Glassnode report, Bitcoin’s consolidation is backed by strong holder demand. The mix of low transaction counts and high volumes suggests that big players are running the show on-chain. Additionally, CryptoQuant data highlighted that BTC inflows to Binance from both whales and retail might be at cyclical lows. These trends suggest that smart money is either accumulating or holding through the volatility, setting a strong foundation for the next major rally. Therefore, $110k could be the beginning, not the top of Bitcoin’s 2025 breakout.