Key Points:
New analysis indicates that, based on historical trends, Bitcoin bulls may benefit from the Federal Reserve's decision to maintain interest rates.
Binance's open interest has decreased, while BTC/USD has created higher lows, potentially increasing upward momentum.
Order book liquidity analysis predicts that a short squeeze will break through $106,000.
Research suggests that Bitcoin should exhibit a "bullish trend" after the dust settles on the Federal Reserve's interest rate freeze.
In a "Quicktake" blog post on Thursday, the on-chain analysis platform CryptoQuant observed that Bitcoin's price action is gaining new momentum.
CryptoQuant noted that Bitcoin has historically performed well during periods of Federal Reserve interest rate freezes, with 2025 potentially providing a particularly bullish market environment.
At the Federal Open Market Committee (FOMC) meeting on June 18 (Wednesday), officials unanimously voted to maintain the current interest rate level, while the market expects a policy shift only in the third quarter.
Analyst Amr Taha summarized, "After the Federal Reserve's recent policy meeting decided to keep interest rates stable, the Bitcoin market has shown a series of complex signals, particularly on the Binance platform."
Taha pointed out a divergence between Bitcoin's price movement and Binance's open interest (OI) — open interest represents the total number of derivative contracts held by traders, including both long and short positions.
"From the chart of Bitcoin's price on Binance and the changes in open interest, it can be seen that Bitcoin has formed a series of equal lows just above $104,000. This level has become a strong demand area, repeatedly absorbing selling pressure," he further explained. "However, in contrast, Binance's open interest has recorded a series of lower lows, indicating that the derivatives market is gradually deleveraging."
Despite the price support level being tested multiple times, the combination of declining open interest and the Federal Reserve's robust policy typically boosts Bitcoin's bullish outlook.
Quicktake summarized, "The timing of this market cleanup coincides with the Federal Reserve's decision to pause interest rate hikes — a macroeconomic signal that usually supports risk assets like Bitcoin. Historical data shows that Bitcoin typically exhibits a bullish trend after periods of stable interest rates, especially when accompanied by signs of liquidation exhaustion and weakening open interest."
During the range fluctuations of BTC/USD, short-term price predictions for Bitcoin remain bullish.
Monitoring resource platform CoinGlass noted that the possibility of a "short squeeze" is rising, with buy order liquidity primarily concentrated around the $106,000 price level.
GM! 🌞 #BTC Liquidation Heatmap (24 hour) High leverage liquidity. 🧐🧐🧐 Shorts Look SO JUICY. Sweep short liquidity first. 🧹🧹🧹 https://t.co/Nu9kTJMzy2 pic.twitter.com/AIwKIkzCIr
Earlier, another liquidity analysis warned that due to the presence of fake orders on the order book, a price drop below $104,000 could lead to a "carpet drop."
CoinGlass's specially developed Derivatives Risk Index (CDRI) hovered in the neutral zone that day, indicating that liquidation risk is slowly rising.
Related: South Korea to investigate domestic cryptocurrency exchange fees
This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
Original article: “Federal Reserve's Pause on Rate Hikes Boosts Bitcoin, BTC Aims for $106K Short Squeeze”
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