Matrixport has released new analysis urging cryptocurrency investors to be cautious of potential market volatility in the short term.
Fed Rate Decision Expectations
With the Federal Reserve's interest rate decision approaching, Matrixport calls on investors to be prudent. The Fed's decision could significantly impact financial markets and the cryptocurrency sector.
Increase in Open Positions and Volatility
Matrixport analysts noted that open interest and funding rates in Bitcoin futures are rising together, potentially leading to short-term market fluctuations. In the past two weeks, Bitcoin's open interest has increased by $6 billion, while the annual funding rate is up to 19%. This coincides with a sharp rise in retail crypto transaction volumes in South Korea, from $1 billion to $6 billion. Matrixport indicates that the high value of open positions, particularly in Bitcoin futures, may foster excessive optimism in the market and a high risk of long positions being liquidated.
Long-Term Prospects for the Crypto Market
Despite the short-term risks, Matrixport maintains a bullish outlook for the remainder of 2025, predicting a continued upward trend. Key catalysts are noted, including the upcoming US FOMC meeting scheduled for next week. "Major catalysts are lining up for the post-summer period, and the overall crypto rally is not over yet, and the broader crypto uptrend is still intact," the company states.
In light of increasing volatility and short-term risks, Matrixport analysts advise investors to stay alert while maintaining a long-term perspective on the crypto market's growth.
