Fed Decision Fails to Convince Bitcoin Bulls! Options Bulls Prepare for a BTC Drop!

The Fed announced a 25 basis point interest rate cut in line with expectations in its decision announced on Wednesday.

While Bitcoin (BTC) and altcoins are on the rise following this decision by the FED, an analyst said that the BTC options market is preparing for a decline despite the FED’s interest rate cut.

Speaking to Coindesk, Deribit CEO Luuk Strijers said that Bitcoin options traders are preparing for a decline despite positive news about the Fed interest rate cut.

Luuk Strijers said that Deribit’s 7-day, 30-day, 60-day, and 90-day delta curves for Bitcoin are all currently negative, indicating a predominance of demand for put options or bearish bets.

Strijers also noted that Deribit’s Bitcoin Volatility Index (DVOL) is at a two-year low of 24%. He added that in a market with high demand for put options, this low volatility is interpreted as a bearish sign.

At this point, Strijers warned that investors may already have seen the Fed’s interest rate cut reflected in the price, and that the worsening economic outlook could reduce demand for risky assets like Bitcoin. He added that investors are waiting for a catalyst other than the Fed.

“Following the Fed’s decision, some of the initial optimism has faded. The market now appears to be waiting for the next catalyst, whether macro or crypto-specific, that will break the deadlock and shift options positions out of the cautious-optimistic balance.”

*This is not investment advice.