Yesterday, the US Federal Reserve (Fed) held interest rates steady for the fourth consecutive time, dampening hopes for a significant rally in risk-on assets like Bitcoin (BTC). However, on-chain indicators suggest that BTC is experiencing strong demand – potentially laying the groundwork for its next move upward.
According to a recent CryptoQuant Quicktake post by contributor Amr Taha, Bitcoin has established a solid demand zone in the mid-$100,000 range. The analyst suggests this could signal BTC’s readiness for another upward rally.
The following chart – titled Binance BTC Price and Open Interest Change – illustrates how this price area has repeatedly absorbed strong selling pressure, resulting in BTC forming consistent equal lows just above $104,000.
In contrast, open interest on Binance has formed a series of lower lows, indicating progressive deleveraging in the derivatives market. Deleveraging typically reduces excess risk and can help build a more stable foundation for sustainable price growth.
Additionally, the $104,000 level has acted as a “liquidation magnet” for late long positions. The following BTC: Binance Liquidation Delta chart shows a sharp concentration of liquidations around this price level.
Green delta spikes in the chart represent the forced closure of long positions, suggesting a cleanup of traders who joined the rally late. Minimal short liquidations confirm that the market was dominated by long squeezes.
To explain, a long squeeze occurs when the price of an asset drops sharply, forcing traders holding long positions to sell or get liquidated. This selling pressure pushes the price down even further, often accelerating the decline.
Interestingly, the timing of this market cleanup coincides with the Fed’s decision to pause interest rate hikes. Such a development has typically worked out as a net positive for risk-on assets like BTC. Taha concluded:
Historically, BTC has shown bullish tendencies following rate stabilization, especially when paired with signs of liquidation exhaustion and fading open interest.
