Fed Rate-Cut Expectations Boost BTC and ETH, Setting the Stage for a Volatile Crypto Session

Crypto markets were steady on Tuesday as investors looked ahead to Wednesday’s Federal Reserve policy announcement, where a 25-basis-point rate cut is widely expected. Confidence around the cut has kept sentiment upbeat, reinforcing the view that looser monetary policy generally favors risk assets such as bitcoin.

Bitcoin traded near $92,300, up 2.3% on the day, while ether outperformed with a 7% jump. Even so, traders are preparing for potential turbulence. Fed decisions often trigger sharp intraday swings, and a largely priced-in 25 bps cut could still prompt a “sell-the-news” reaction if market participants doubt the sustainability of recent gains, pressuring prices and trapping late long positions.

Over the past week, BTC has carved out a range between $88,000 and $94,500. A break beyond either boundary is expected to set the tone for the next directional move.

Derivatives positioning

Bitcoin’s one-day implied volatility on Volmex surged to 67% from 20%, implying a roughly 3.5% expected daily move—elevated but still suggesting the Fed outcome is unlikely to deliver an outsized shock.
Ether is priced for a 4.6% swing, while solana and XRP are projected to move about 5%.
BTC’s options term structure remains slightly inverted, with front-end volatility more expensive than longer maturities. A muted Fed event could quickly normalize the curve.
On Deribit, puts for both BTC and ETH continue to trade at a premium to calls. Block activity showed traders adding ETH straddles and strangles—classic volatility plays—while BTC activity leaned toward risk reversals.
Futures open interest is climbing across most large-cap tokens. ETH OI rose 8% to 12.4 million ETH, the highest since Dec. 2. Cardano briefly touched 1.80 billion ADA in OI, the highest since Oct. 10.
Funding rates for BCH, XMR and WLFI are sharply negative, indicating aggressive short positioning.
On the CME, ether futures OI is back above 2 million ETH, while bitcoin futures positioning remains subdued near multi-month lows.

Token talk

Altcoins continue to lag, despite renewed interest in ether following last week’s Fusaka upgrade. CoinMarketCap’s altcoin-season index sits at 16/100—a cycle low and a stark contrast to the September high of 78/100—highlighting traders’ preference for deeper liquidity ahead of the Fed announcement.

HYPE has been among the week’s weakest performers, falling 15%. STRK, KAS and APT have also posted double-digit declines. Meanwhile, AI-focused token FET rose 9.3% over the past 24 hours as it staged a short-term rebound, though it remains down 1.6% on the week and more than 80% lower year-to-date.