Bitcoin Traders De-Risk Ahead of Fed Decision as Spot Demand Holds Steady

Bitcoin futures open interest has declined by $2 billion in five days, dropping below $40 billion as traders scale back exposure ahead of the U.S. Federal Reserve’s interest rate decision. The reduction in leverage, coupled with subdued futures volume, signals cautious positioning among derivatives market participantsBTC Traders Cut $2B Leverage Before Fed Rate Cut Decision^[1]. On-chain data indicates that Bitcoin’s open interest fell from $42 billion to $39.9 billion between last Friday and Tuesday, reflecting a strategic de-risking amid heightened macroeconomic uncertainty. The funding rate for perpetual futures contracts has also trended downward, with a notable spike in London session activity on Tuesday—comparable to a prior market top in AugustBTC Traders Cut $2B Leverage Before Fed Rate Cut Decision^[1].

Aggregate futures volume remains near cycle lows, with Binance’s net taker volume averaging below $50 million, far below its typical $150 million benchmarkBTC Traders Cut $2B Leverage Before Fed Rate Cut Decision^[1]. This muted activity underscores a market in wait mode, as traders defer decisive positions until post-Fed clarity. However, spot demand on Coinbase suggests a different narrative: the Coinbase premium, which measures the price gap between Bitcoin on Coinbase and other exchanges, has risen steadily since early August, reaching a buying cluster near $115,000BTC Traders Cut $2B Leverage Before Fed Rate Cut Decision^[1]. Analysts attribute this to robust U.S. investor inflows defending key price levels, with the premium indicating strong buyer resilience.

Bitcoin’s price has held near $113,000 despite the open interest decline, supported by broader sentiment indicators. The Bitcoin Bull Score, a momentum gauge, has rebounded to a neutral 50 from a bearish 20 over four days, signaling easing selling pressureBTC Traders Cut $2B Leverage Before Fed Rate Cut Decision^[1]. Meanwhile, the Bitcoin Risk Index, tracked by Axel Adler Jr., stands at 23%, near cycle lows, suggesting a calmer environment with reduced liquidation risksBTC Traders Cut $2B Leverage Before Fed Rate Cut Decision^[1]. Historical parallels to the September-December 2023 period—when Bitcoin traded stably before entering a new uptrend—have drawn attention to potential structural support.

CME Bitcoin futures data further contextualizes the price action. As of late September 2025, Bitcoin futures traded at $115,265, with price fluctuations of up to 2.13% in a single sessionBitcoin Futures CME Historical Data^[2]. The CME data highlights volatility amid consolidation, with prices oscillating between $111,000 and $117,000 over two weeks. While the open interest decline suggests short-term caution, the absence of sharp liquidation events and steady spot demand indicate underlying stability.

Open interest itself is a critical metric for assessing market dynamics. Defined as the total number of active perpetual futures contracts, open interest reflects capital flow into the marketBitcoin (BTC) Futures Open Interest: Live Data Across All Exchanges^[3]. Rising open interest typically signals new capital entry and potential price momentum, while falling open interest may indicate position unwinding or trend reversals. In this case, the $2 billion drop aligns with traders locking in profits or reducing leveraged bets, but the concurrent rise in Coinbase premiums and stable risk indices suggests a balance between caution and quiet confidence in Bitcoin’s near-term trajectory.

The market’s mixed signals highlight a pivotal phase ahead of the Fed’s decision. Derivatives traders are de-risking, but spot buyers remain active, particularly in U.S. markets. If the Fed signals dovish policy, the current consolidation could give way to renewed upward momentum, potentially testing the $118,000 resistance level. Conversely, hawkish guidance may extend the current range-bound environment. For now, the interplay between open interest, funding rates, and spot demand will remain key indicators for market direction.