Bitcoin is searching for direction around $64,000 ahead of the US Federal Reserve’s interest rate decision. Market indicators point to a quiet evening, but the probability of a rate increase and billions of dollars in derivatives positions create conditions for sharp price movements after the announcement.
The Fed will announce its interest rate decision at 2:00 p.m. ET. Fed Chair Kevin Warsh will hold a press conference at 2:30 p.m. ET. According to CME FedWatch data, markets assign a 66.3% probability to no change and a 33.7% probability to a 25-basis-point increase.
Bitcoin rebounded from support near $62,850 and climbed as high as $64,600 during the day. However, the $65,000–$65,200 range remains the first major obstacle to further gains.
Options market points to $64,000
Bitcoin’s current price remains close to the level where large options positions are concentrated. Approximately $9.61 billion worth of Bitcoin options will expire on July 31. The calculated max pain level for these contracts stands at $64,000.
Max pain refers to the price at which the largest number of options contracts expire worthless. It does not provide a definite price target, but it partly explains why Bitcoin remains confined around $64,000 as the expiration date approaches.
Bullish positions are also attracting attention. Investors have built approximately $2.5 billion in call option strategies targeting a move toward $72,000 by the end of the month. Calls also dominate the July 31 expiry, accounting for 116,260 BTC.
Investors seek last-minute protection
The put/call open interest ratio in Bitcoin options fell from 0.76 at the end of June to 0.52. This shift shows that investors hold less downside protection than they did last month.
However, puts with strike prices of $62,000, $60,000 and $54,000 led trading volume over the past 24 hours. Overall positioning still favors the upside, but some investors have protected their portfolios against a sudden post-Fed decline.
Total open interest across crypto futures remained near $113 billion. Trading volume increased 10% to $205 billion, while the ratio between long and short positions moved close to balance.
Low volatility increases the risk of a surprise
Bitcoin and Ethereum’s 30-day implied volatility indicators remain near recent lows. In other words, the derivatives market does not expect an unusually large short-term move.
This calm stands out ahead of a meeting where the probability of a rate increase exceeds 33%. If the Fed moves against the market’s main expectation, low volume and limited hedging could magnify the price reaction.
K33 Research data also shows a slowdown in trading activity. Bitcoin’s average daily spot trading volume fell to approximately $2.2 billion in July. The month is on track to record the lowest volume since November 2023.
Critical levels for Bitcoin
A rate hold accompanied by a softer message from Warsh would direct Bitcoin toward resistance between $65,000 and $65,200. A break above this zone would bring the $65,800–$66,200 range and last week’s $66,700 high into focus.
If Warsh signals a September increase despite keeping rates unchanged, the initial rally may lose momentum. Under this scenario, Bitcoin would fall below $64,000 and test support between $62,000 and $62,500.
A surprise increase would push the dollar and US Treasury yields higher. Such an outcome would accelerate selling in Bitcoin and Ethereum while triggering liquidations among leveraged long positions. Lower liquidity would expose altcoins to even sharper moves than the leading cryptocurrencies.
Bitcoin remained stronger than technology stocks throughout July. Tonight’s decision will provide an important test of whether the crypto market can continue separating from the Nasdaq.
