Crypto markets held firm on Tuesday as investors positioned ahead of Wednesday’s Federal Reserve meeting, where a 25-basis-point rate cut is overwhelmingly expected. With the move largely priced in, digital assets continued to trade with a constructive tone, supported by broader optimism around easier monetary policy.
Bitcoin traded near $92,300 after climbing 2.3% over the past day, while ether extended its recent strength with a 7% surge. Still, traders are preparing for turbulence. Fed decisions frequently trigger rapid intraday swings, and even a supportive 25 bps cut could spark profit-taking if investors believe the rally has run ahead of itself, potentially forcing late longs into losing positions.
BTC has spent the past week consolidating between $88,000 and $94,500. A break outside that band is likely to define the next directional move.
Derivatives positioning
- Volmex’s one-day implied volatility reading for bitcoin jumped to 67% from 20%, implying an expected move of roughly 3.5%—elevated but not signaling an extreme reaction to the Fed.
- Ether is priced for a 4.6% swing, with solana and XRP projected to move about 5%.
- BTC’s options term structure remains mildly inverted, with short-dated volatility trading above longer maturities. A low-impact Fed decision could quickly normalize that curve.
- On Deribit, BTC and ETH puts continue to command premiums over calls. Block flow activity showed strong interest in ETH straddles and strangles—classic volatility strategies—while BTC traders leaned into risk-reversal setups.
- Futures open interest continues to rise across major tokens. ETH OI increased 8% to 12.4 million ETH, its highest level since Dec. 2. Cardano’s OI briefly touched 1.80 billion ADA before easing slightly.
- Funding rates for BCH, XMR and WLFI remain deeply negative, underscoring heavy short bias.
- On the CME, ether futures OI has moved back above 2 million ETH, while bitcoin futures participation remains anchored at multi-month lows.
Token talk
Ether remains the standout among large caps following last week’s Fusaka upgrade, but the rest of the altcoin market continues to lag. CoinMarketCap’s altcoin-season index has dropped to 16/100, a cycle low and a stark reversal from September’s high of 78/100, reflecting traders’ preference for deeper liquidity ahead of the Fed announcement.
Among individual names, HYPE has been one of the week’s weakest performers, falling 15%. STRK, KAS and APT have also seen double-digit declines. AI-focused token FET was a rare bright spot, gaining 9.3% in the past 24 hours as it rebounded from recent lows—though it remains down 1.6% on the week and more than 80% year-to-date.
