The Bitcoin (BTC) options market trends inform moderate risk aversion ahead of the Federal Reserve Chairman’s expected statements on Wednesday by Chairman Jerome Powell on potential June interest rate cuts.
“The Federal Reserve is widely expected to remain stable at this week’s meeting, but we saw only subtle demand for protected BTC puts, reflecting limited attention among sophisticated traders,” said Luuk Strijers, CEO of Crypto Options Exchange Deribit.
The put options provide the buyer with what is appropriate, but do not qualify for the obligation to sell the underlying assets at a given price before a specific date. Think of it as insurance against price fluctuations. Traders usually buy put options when they profit or protect from long spot market positions from market slump.
Deribit is the world’s leading crypto option exchange, recording billions of dollars in daily trading volumes. In Deribit, one option contract represents one BTC.
Strjers explained that the broader options market has not shown strong directional bias or critical slope towards downside hedges.
“The Spot BTC has been raised to around $94,000, and Deribit’s DVOL, an implicit volatility index, sits at 45. It was last observed overall.
However, traders operating in decentralized exchanges appeared to be more cautious and worried about the downside risks.
“There’s evidence of downside protection as traders are buying, and because they’re struggling at $82,000, $78,000 and $76,000. There’s probably concern over a Federal Reserve meeting that could lead to rate cuts.
Previously, Lyra was one of the leading on-chain options platforms, accounting for more than 20% of total chain activity in April of $1.38 billion, according to data source Defilama.
On Wednesday, the Fed could stabilize its benchmark interest rates in the 4.25%-4.50% range. That’s a natural conclusion.
At the same time, Powell could maintain a broad data-dependent stance at post-decision press conferences.
But Powell could be asked about the outlook for interest rate cuts in June and the economic uncertainty stemming from President Donald Trump’s recent trade war with China.
Dex’s traders’ fears can be attributed to what Powell said about two issues.
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