Recent on-chain data reveals an interesting signal: large funds seem to be retreating before the rate cut expectations materialize.

Let's look at these key changes. The BTC balance on exchanges is decreasing. At first glance, it might look like someone is accumulating coins, but a more likely scenario is—institutions are transferring coins to cold wallets to avoid the risk. The focus isn't on increasing holdings but actively reducing market exposure.

Stablecoin reserves are rising simultaneously. The holdings of USDT and USDC have significantly increased, which is a typical defensive move: converting volatile assets into stable assets to maintain liquidity, waiting for the market trend to clarify.

Looking at open interest (OI) in CME futures, it has recently been mostly flat. If large funds were truly bullish, OI would have started to rise. The current stagnation indicates one thing: professional players are cautious about betting on a direction before policy implementation; they are watching from the sidelines.

This behavior reminds me of the market rally from August to October 2025. Back then, a few days before the FOMC meeting, funding rates soared, and BTC prices moved higher in advance, seeming very optimistic. But after the meeting, funding rates quickly dropped, and prices sharply retraced within days.

The current on-chain signals and derivatives data are almost identical to that period.

Some may ask: Isn't a rate cut a good thing? Theoretically, yes, but the problem is that the market has already priced in this expectation. The Fed will cut rates, financial conditions will improve, liquidity will increase—all of this is reflected in the price. Once the positive news is fully priced in, the real uncertainty occurs at the moment the news is announced.

So if BTC continues to rebound before the FOMC, don’t get too excited. Such pre-rally movements are often driven by sentiment alone, and the real volatility may only come after the meeting. What large institutions are doing now is clear: reducing risk exposure and preparing for high volatility. Retail investors, should you prepare too? That’s up to you.