Bitcoin Leverage Nears $40 Billion Ahead of Key Fed Vote

The crypto market is bracing for a potentially seismic moment. As Bitcoin surges toward the $116,000 mark, traders are stacking up leveraged positions—and it’s not a minor uptick. Total open interest across Bitcoin derivatives has climbed toward the $38–40 billion range, according to data from CryptoQuant, signaling elevated risk, high conviction and the possibility of sharp volatility. 

The Macro Trigger: A Fed Decision in Focus

The catalyst behind this buildup is the forthcoming rate decision from the Federal Reserve, expected to deliver a 25-basis-point cut to the funds rate—a move that markets have largely priced in. With inflation showing signs of easing and the U.S. government shutdown underway, liquidity expectations are rising and risk assets like Bitcoin are responding accordingly. 

What the Numbers Tell Us

Bitcoin’s open-interest figure has moved from around $33 billion to nearly $38 billion, in parallel with the rally from ~$107,600 to ~$116,000. 

To provide perspective: earlier this month open interest peaked near $47 billion when Bitcoin briefly touched ~$126,080. So while current levels are high, they are not yet record highs. 

Market prediction tools such as the Myriad platform show a 92.6% probability of the rate cut this week. One analyst notes that “the upcoming FOMC meeting is widely expected to deliver a 25-basis-point cut to 4.00–4.25%,” which traders appear to be front-running. 

Why Now Matters

Leverage functions like a double-edged sword: on the one hand, it amplifies gains when the trend persists; on the other, it heightens the risk of cascading liquidations if sentiment turns. With open interest soaring, even a moderate shift in expectation could spark outsized moves—especially since many positions are likely built on the anticipation of monetary easing → risk-on rally.

For Bitcoin in particular, the melding of macro expectations (Fed easing) and crypto flows (ETF inflows, derivatives buildup) has created a reinforcing loop of bullish momentum. Yet the game is no longer simply “buying the dip”—it’s about correctly timing entry in a highly leveraged, sentiment-driven environment.

Risk Factors and What to Watch

Unexpected hawkishness: If the Fed signals caution or delays further cuts, risk assets could deflate rapidly.

Leverage unwind: With billions in open interest, a sudden drop can force forced sales, gasping the rally.

Data vacuum: With the U.S. government shutdown limiting fresh economic prints, surprises either way are more probable.

Correlation with equities: If traditional risk assets wobble, crypto may follow—even if its structural narrative remains intact.

The Takeaway

Bitcoin’s current setup is a textbook example of “liquidity-meets-leverage meets policy moment.” With nearly $40 billion of leveraged bets riding on monetary easing, the crypto market is primed for a breakout—or a breakdown.

For investors and traders, the message is clear: larger macro narratives—interest-rate policy, liquidity flows, fiscal stability—are now inseparable from crypto price action. It’s a reminder that Bitcoin is no longer an isolated asset class—it’s woven into the same structural forces driving global finance.

Source: Decrypt — “Bitcoin Leverage Nears $40 Billion Ahead of Key Fed Vote” (October 28, 2025