During the start of the Asian trading session, the Bitcoin price has shown notable stability, holding within the $90,000 range. According to recent reports from QCP Capital and analysis by Gracie Lin, CEO of OKX Singapore, this behavior responds to a marked decrease in liquidity typical of year-end, added to expectations of upcoming Federal Reserve decisions. Although there were brief swings over the weekend, the current structure suggests caution among large institutional investors.
Hard market data reveals a significant decline in active participation, specifically in perpetual open interest for both BTC and ETH. Since October, this key indicator has dropped by nearly half, which considerably weakens the capacity of the market to absorb large directional trades without suffering volatility. On the other hand, odds observed on prediction platforms like Polymarket indicate that traders have already priced in the 25 basis point cut expected for this week, also anticipating a possible pause in the cutting cycle for January.
How do central bank policies influence the current trend?
Gracie Lin highlights that the recent clearing of leveraged positions has been beneficial, as it has improved the general market structure by removing trades that were overcrowded. This “reset” allows the asset room to move without the pressure of forced flows, creating a healthier technical environment for the valuation of the digital asset. However, the focus is shifting rapidly from the rate cut itself to the future guidance the Federal Reserve will offer, this being the true catalyst that investors are waiting for.
Additionally, the divergence in monetary policy signals among major economies plays a crucial role in the valuation of global risk assets. While the Bank of England appears divided and the European Central Bank holds firm, the Bank of Japan prepares to tighten policy, reaching yield levels not seen since 2007. Therefore, movements in the cryptocurrency sector will depend more on how global capital adjusts to these macroeconomic frictions than on already known inflation data.
The market seems destined to remain in a narrow lateral range as long as scarce activity and liquidity characteristic of the holiday season persist. Thus, traders must be very attentive to the interpretation of the Fed’s guidance, as a strategic pause is anticipated in rate cuts for the beginning of next year. Future price direction will depend entirely on how investors assimilate the new guidelines and the policy split among global central banks.
