Bitcoin Slides Back Near a Key Vulnerability Area With Fed Decision on Deck

Bitcoin gave up its early-week momentum on Tuesday, sliding back toward the $90,000 threshold as markets waited for clarity from Wednesday’s Federal Reserve rate announcement.

Crypto assets broadly weakened throughout the day, erasing Monday’s advances. Bitcoin last traded around $90,150, retreating from its earlier high of $92,350. The CoinDesk 20 Index (CD20) fell 2.1% over the past 24 hours, with every component posting losses.

The pullback resembles last week’s pattern, when bitcoin surged from $86,300 to $93,200 between Sunday and Tuesday before reversing to $88,000 later in the week.

The difference this time is the looming Fed decision. Traders widely anticipate a 25 basis-point rate cut — typically positive for risk assets because lower yields reduce the incentive to hold dollars. But markets have been pricing in this cut for weeks, raising the risk of a “buy the rumor, sell the news” reaction if no new bullish catalysts emerge for the remainder of the year.

Derivatives positioning

Despite the approaching Fed announcement, volatility gauges have stayed calm. Bitcoin’s BVIV and ether’s EVIV 30-day implied volatility indexes were little changed.

On Deribit, traders were active in June expiries, scooping up deep-out-of-the-money puts at strikes down to $20,000 and buying calls above $200,000 — trades that suggest positioning for volatility rather than directional conviction.

Across the board, BTC and ETH puts continue to command higher premiums than calls. Recent block activity has featured risk reversals and put-diagonal spreads in bitcoin, while ether saw interest in call spreads and risk-reversal structures.

Futures markets show declining open interest for most major tokens, including BTC and ETH. Bitcoin Cash (BCH) registered an 8% drop in OI, whereas Zcash (ZEC) bucked the downtrend, climbing 16% to 2.30 million ZEC — just shy of its Dec. 4 all-time high of 2.32 million.

Token talk

Altcoins remained under heavy pressure as risk appetite across the market continued to deteriorate. HYPE slumped 8.6% over the past day, while STRK, QNT and KAS declined between 5.7% and 6.3%.

CoinMarketCap’s “altcoin season” gauge has slid to 18/100, far below the Sept. 20 reading of 78/100.

Bitcoin has dropped roughly 20% over the past 90 days, but altcoins have fared far worse: more than half of the top-100 tokens by market capitalization have fallen more than 40% over that period.