As Bitcoin prices retreat further from their all-time highs to $107,000, the market is currently trading above the cost basis for short-term holders. In the spot market, momentum weakened further as the Relative Strength Index (RSI) dipped into oversold territory, while declining trading volume reflected diminishing market confidence. Spot CVD showed some easing of selling pressure, suggesting a temporary stabilization of the market, but overall signals indicate weak demand.
VX:TZ7971
Futures markets are showing cautious positioning. Declining open interest, lower margin payments, and a slight improvement in perpetual swap CVD suggest declining leverage and diminishing bullish sentiment. Traders appear reluctant to increase their risk exposure, highlighting a defensive strategy adopted following recent volatility.
In the options market, participation declined due to lower open interest, and volatility spreads narrowed, suggesting complacency. However, the 25 Delta slope surged above a historical extreme, highlighting strong demand for downside protection and reinforcing a defensive bias among options traders.
Market structure remains fragile, with bearish pressure dominating spot, futures, and on-chain indicators. ETF inflows have provided a temporary buffer, but shrinking trading volumes and declining profitability highlight a lack of market confidence. While a short-term rebound is possible, overall market sentiment remains defensive, and further market consolidation is likely unless demand strengthens again.
The market generally expects the Federal Reserve to cut interest rates for the first time this cycle in September. Historically, Bitcoin tends to rise before easing policies are implemented, but retreat after rate cuts are implemented. If there is a rate cut in September, how might the market react?
Rate cuts in 2024: Narrative trumps liquidity
The trend changed in 2024. BTC did not fall back after the interest rate cut, but continued its upward momentum.
The reasons are:
Trump's campaign turned cryptocurrency into an election issue.
Spot ETFs are attracting record inflows.
MicroStrategy continues to see strong buying demand at the balance sheet level.
In this context, the importance of liquidity has declined, with structural buying and political factors overriding traditional economic cycle influences.
September 2025: Conditional market launch
The current market backdrop is different from the runaway rallies of past cycles. Bitcoin has been consolidating since late August, ETF inflows have slowed significantly, and corporate balance sheet buying, once a persistent tailwind, has begun to wane.
This makes the September rate cut a conditional market trigger rather than an immediate catalyst.
If Bitcoin rises sharply before the interest rate meeting, the risk of history repeating itself will increase - that is, traders "sell the fact" after the easing policy is implemented, resulting in a "rise followed by a fall" situation.
But if prices remain stable or move slightly lower before the decision, much of the excess positioning may have been eliminated, making the rate cut more of a stabilizing force in the market rather than an end to the upward momentum.
The current trend of Bitcoin may be affected by the Federal Reserve’s September interest rate meeting and related liquidity changes. Overall, Bitcoin may see a wave of increases before the FOMC meeting, but the increase may be difficult to break through new highs.
If prices rise sharply before the meeting, then a "sell the news" pullback is likely;
However, if prices consolidate or fall between early September and the meeting, there is a possibility of an unexpected rise due to interest rate adjustments.
However, even if a rebound occurs, the market still needs to remain cautious. The next leg up may form a lower high (around $118,000 to $120,000).
Assuming this lower high occurs, it could set the stage for the latter half of Q4, when liquidity conditions are expected to stabilize and demand could pick up again, pushing Bitcoin towards new highs.
Today's panic index is 49, rising to a neutral level.
This week will feature a plethora of economic data releases. The non-farm payroll data on Thursday and Friday will likely trigger significant market volatility. Tonight's manufacturing PMI and Thursday's services PMI will also trigger market volatility if they deviate significantly from expectations. Currently, the WLFI appears to have little impact on market trends, so the focus should remain on the impact of US economic data. For those who only trade BTC and Ethereum, keep an eye on the key round numbers of 100,000 and 4,000 as entry points.
Sun Ge is also awesome, nothing he touches is good, and WIFI is at its peak as soon as it opens. If you want to pick up trash, you can pay attention to the 0.2 position and try to get an oversold rebound.
