Markets on Edge Before Federal Reserve Announcement
Bitcoin is once again at the center of attention this week. The options market is flashing signs of caution, yet many professional traders are quietly leaning bullish. With the U.S. Federal Reserve set to announce its latest rate decision, investors are split on whether a possible cut has already been priced in — or if there’s still room for a surprise rally.
Key Highlights
-
The Bitcoin options delta skew climbed above the 7% neutral line, a signal that traders are hedging carefully.
-
The long-to-short ratio of top traders went risen, thanks to $292 million in spot ETF inflows.
-
Bitcoin (BTC) touched $115,633 midweek and briefly tested the $117,000 mark, but couldn’t hold the momentum.
-
Broader sentiment was also weighed down by chatter of fresh U.S. restrictions on AI chip sales to China.
Bitcoin Fails to Hold $117K as Traders Turn Wary
On Wednesday, Bitcoin came within striking distance of $117,000, only to slip back as traders questioned whether the Fed’s rate decision was already factored in. At the same time, stories came out saying that Beijing could have to follow stricter rules when buying AI microchips. This scared the tech industry.
Nvidia (NVDA) shares fell 2.6% after the report, which raised more questions about demand from China. That left traders wondering:
👉 Is Bitcoin setting up for a move toward $110,000, or are investors simply taking precautions ahead of Jerome Powell’s statement?
Options Data Hints at Growing Caution
Fresh data from Deribit shows the 30-day Bitcoin options delta skew pushing above 7%. In other words, put (sell) options are more expensive than call (buy) options right now. This is a little change from the 5% neutral level seen earlier in the week.
The change doesn’t mean traders are panicking, but it does show that they tend to guard against downside risk. The put-to-call ratio is currently at 71%, which is a long way from the 180% level of panic that was seen in April when Bitcoin briefly fell below $75,000.
So far, the options market is leaning cautious but not outright bearish — more of a “wait and see” stance until the Fed speaks.
Fed’s Rate Call Could Decide the Next Move
Attention now turns to the Federal Reserve’s decision on interest rates. Chair Jerome Powell’s comments will be closely watched to see whether the central bank hints at easing policy.
Global trade tensions are adding to the uncertainty. The Financial Times reported that China’s internet regulator has moved to ban the purchase of certain Nvidia chips. Responding to the news, Nvidia CEO Jensen Huang said:
“I’m disappointed with what I see, but they have larger agendas to work out between China and the United States, and we’re patient about it.”
Pro Traders Still Lean Bullish Despite the Signals
Interestingly, while the options market reflects hedging, top traders at Binance and OKX actually increased their long positions on Wednesday. This indicates that whales and market makers are positioning for potential gains, even if the short-term mood looks cautious.
Adding to that optimism, Bitcoin spot exchange-traded funds (ETFs) recorded $292 million in net inflows on Tuesday, fueling hopes that prices could soon retest the $120,000 zone.
Still, it all comes down to how restrictive or flexible U.S. monetary policy looks after the Fed’s decision — and whether tensions with China calm down.
Outlook: Between Optimism and Uncertainty
In short, Bitcoin dealers are being careful and quietly hopeful about what the Fed will say.
-
Options data shows hedging activity.
-
ETF inflows and long bets from top traders show that people are confident in the larger picture.
If the Fed signals a softer stance and trade tensions don’t escalate further, Bitcoin may well push higher. But until then, the $115,000–$117,000 range looks like the battleground where bulls and bears are testing their strength.
Discover more from PPD News
Subscribe to get the latest posts sent to your email.
2 thoughts on “Bitcoin Traders Weigh Risks as Options Market Shows Caution, but Big Players Stay Bullish Ahead of Fed Decision”