Spot Buying Drives BTC Rally As Market Expects Fed Price: Bitfinex

As Bitcoin (BTC) faces local resistance levels, the crypto asset is experiencing a rally led by aggressive spot market activity.

According to Bitfinex Alpha, on-chain metrics show that bitcoin's momentum is currently strong. This view is reinforced by the increasing number of Bitcoin Exchange Traded Funds (ETFs) entering the United States and growing confidence among retail and institutional investors.

The movement of the spot moves the momentum of the bull

Bitcoin's bullish momentum can be seen on Spot Cumulative Volume Delta (CVD) data. This metric measures the net volume of spot market orders across all exchanges by subtracting the volume of sell orders from buy orders. Since falling below $53,000 in early September, the property's spot CVD has pushed the price higher.

Analysts for stablecoin-margined and coin-margined perpetual markets CVD also gathered; However, their movements are very limited, which shows that bitcoin's continuous rally is driven by spot movements rather than by perpetual or futures market participants.

“This type of buying behavior is typically seen as a more sustainable basis for price appreciation, as it demonstrates direct capital's commitment to the asset,” Bitfinex said.

BTC at the resistance level

The price increase has brought BTC to the $60,500-$61,000 resistance level, which analysts say is a concern. This level has played an important role in all the price movements in the market since the beginning of March.

Another concern is how the CVD position is holding up when the price of Bitcoin is driving; Bitfinex said this measure could be halted if there is a risk-off event before or after this week's highly anticipated Federal Open Market Committee (FOMC) meeting.

Historical data shows that stocks and risk assets often see a selloff in lower time frames after the Fed announces rate cuts. However, Bitfinex insists that this pattern is not an infallible prediction of future trends.

The crypto market is currently prone to volatility due to investor expectations regarding the upcoming price cut. If the Fed implements a 25 basis point or 50 basis point cut, Bitfinex said market behavior could oscillate between a cautious and risky pace.

Meanwhile, total Bitcoin open interest across all perpetual trading pairs has jumped roughly 14 percent since BTC fell below $53,000.