Bitcoin today: BTC consolidates at $93,000 ahead of possible interest rate cut in the US

Source: PortaldoBitcoin Original Title: Bitcoin today: BTC consolidates at $93,000 ahead of possible US interest rate cut Original Link: With the Federal Reserve’s interest rate decision, the US central bank, scheduled for less than a week from now, speculation is running high among investors about where the price of Bitcoin will go, with more than $6 billion in positions in the derivatives market at risk of liquidation.

This Thursday, the cryptocurrency is consolidating its price in the previously achieved range of $93,361, while rising 0.2% on the day. In Brazilian real, BTC is trading at R$496,457.

Nearly $3 billion in short positions (betting on the asset’s decline) will be liquidated if Bitcoin rises just 3%, reaching $96,250, according to CoinGlass data. On the other hand, $3.52 billion in long positions (betting on the asset’s increase) will be wiped out if Bitcoin falls 4.54%, dropping to $89,209.

“Cryptocurrencies are facing strong resistance to upward moves, with market participants still maintaining a pessimistic mindset, leaving the market highly vulnerable,” said Adam Chu, chief researcher at options analytics firm GreeksLive, to Decrypt.

Bitcoin Short Squeeze

With bond traders pricing in nearly a 90% chance of a 0.25 percentage point cut in US interest rates, a possible price increase could trigger a short squeeze, pushing Bitcoin close to the psychological level of $100,000.

A short squeeze occurs when the price moves against pessimistic investors’ bets, forcing them to cover their positions through purchases, which accelerates the underlying asset’s upward trend.

Current market conditions set up a high-risk contest ahead of the Fed’s decision, in which underlying fragility could amplify the impact of the central bank’s monetary policy signal.

However, a closer analysis of derivatives data shows a more complex picture.

Open interest in Bitcoin derivatives contracts has been steadily declining since November 21, even as the delta of accumulated perpetual contract volume rises—a pattern suggesting traders are closing short positions.

In other words, the data indicates that Bitcoin is not rising because traders are optimistic. Instead, prices may be being pushed up as short sellers close their positions, while spot buying remains weak.

Still, funding rates and premium indicators, which help determine investor positioning and demand for spot buying, remain indecisive, showing no clear direction.

For the upward trend to strengthen, it will likely require a sustained increase in the cumulative spot volume delta and open interest.

The depth of spot and perpetual order books of up to 10% has turned negative since December 2, as traders remain reluctant to push prices higher.

“At this point, a short squeeze seems more likely than a long squeeze,” said Ryan Lee, chief analyst at an analytics platform. “Institutional flows remain stable, regulatory signals are more constructive, and sentiment is gradually shifting toward greater risk appetite.”