The probability of a 25-basis-point Federal rate hike to 375-400 bps reached 87.3% according to the FedWatch tool, increasing bearish risks for Bitcoin. The asset retraced into a key demand zone at $76k after Friday’s U.S. CPI report triggered $685.5 million in liquidations and four days of spot ETF outflows. While long-term buying persists, short-term caution could escalate into panic, threatening bullish momentum.
Bitcoin’s price action has been caught between persistent long-term buyers and short-term caution, as noted by XWIN Japan in a CryptoQuant analysis. The short-term trends could flip bearishly again if caution turns into panic.
Friday’s U.S. CPI report introduced high volatility, causing $685.5 million in liquidations across the crypto market. The past four trading days also recorded outflows from Bitcoin spot ETFs.
Binance BTC reserves hit a two-year high, and the Coinbase Premium Index slipped into negative territory. An uptick in U.S. investor demand at the end of August and early September had briefly signaled market confidence.
Bitcoin had been climbing toward the $82k resistance, but increasing odds of a rate hike have hurt short-term bullish momentum.
Analyst Axel Adler Jr. noted on X that Bitcoin Open Interest declined by 13,600 BTC in a single day. During this period, Bitcoin rallied from $77,000 to $79,900 before retracing most of those gains within hours.
This liquidity flush and the OI decline have reduced the likelihood of a liquidation cascade by wiping out over-leveraged traders. A market regime shift would require positive Coinbase Premium Index values to signal increased investor interest.
Another factor would be the exchange net position change turning negative to indicate accumulation. Negative values in the second half of August accompanied the rally toward $82,000, and sustained withdrawals from exchanges could support the next bullish leg.
