BTC Demand Cools After Fed Presser, Volatility Ramps Up

Key takeaways:

• Bitcoin’s Coinbase Premium turned negative after a 62-day buying streak.

• BTC continues to hold above $115,000 despite rising sell pressure and a negative futures CVD.

The Bitcoin (BTC) Coinbase Premium Index has turned negative for the first time since May 29, ending 62 days of being positive. The metric, which tracks the price difference between Coinbase’s BTC/USD and Binance’s BTC/USDT pairs, is commonly used as a proxy for US spot demand.

This market shift comes after an even longer 94-day run of a sustained positive premium gap, marking Bitcoin’s strongest institutional demand period on record. While the flip may hint at fading appetite from US buyers, broader market signals suggest a more nuanced setup is forming.

According to onchain analyst Boris Vest, Bitcoin’s taker buy/sell ratio has dropped to 0.9, indicating increased selling from market makers. Despite the sell-side aggression, Bitcoin’s price continues to hold higher levels above $115,000, signaling that larger passive buyers are stepping in to absorb the pressure. 

Meanwhile, the futures funding rate remains neutral at 0.01, showing neither bullish nor bearish dominance, which implies that leverage is balanced and a larger move remains on the cards. 

Vest also highlighted that the futures’ cumulative volume delta (CVD) continues to reflect persistent sell pressure without causing any major breakdowns in price. This divergence between volume and price action suggests underlying strength and may set the stage for a liquidity-driven shakeout before any sustainable upward move.

Related: Bitcoin price gained 50% the last time its volatility fell this low

Bitcoin is at a crossroads moment

While fresh spot demand appears to be cooling, there are signs that profit-taking is also tapering off. The Net Realized Profit/Loss (NRPL) metric shows no evidence of large-scale exits, and the Adjusted SOPR remains well below the 1.10 threshold typically associated with market tops. These indicators suggest that investors remain confident in the current market structure and are not rushing to secure profits.

Macro conditions further support this view. The US Job Openings and Labor Turnover Survey (JOLTS) report on Tuesday came in slightly weaker than expected, reinforcing a “Goldilocks” backdrop that favors risk assets. Meanwhile, Consumer confidence rebounded after a six-month decline, reflecting a broader recovery in investor sentiment.

Bitcoin remains in a neutral position, and the next decisive move may follow the Federal Open Market Committee (FOMC) meeting. Commenting on the potential for volatility, trader Titan of Crypto pointed to tightening Bollinger Bands on the daily chart, a technical indicator that measures volatility. When these bands compress, it often signals that a major breakout or breakdown is imminent. The analyst said, 

“Bitcoin in a pressure cooker. Bollinger Bands are squeezing = volatility is drying up. RSI is compressing too. A big move is brewing.”

Related: Bitcoin bulls aim to chase liquidity at $122K, but Q3 seasonality could stall breakouts

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.