Key Points:

• Bitcoin's seven-day put options are trading with the highest implied volatility premium since September.
• The call skew in longer duration options is declining.
• The Federal Reserve anticipates just two interest rate cuts in 2024, a decrease from earlier projections.

Crypto traders' concerns regarding a hawkish Federal Reserve became apparent when Jerome Powell announced a modest interest rate cut while signaling caution about future adjustments. The sentiment surrounding Bitcoin has thus deteriorated.

Bitcoin's options market now shows a historical peak in demand for put options as traders seek protection against potential dips.

Analysis

The market's unease following the Fed's decision is evidenced by the increasing premiums on put options, signaling traders' attempts to guard against further downturns. The Fed's stance indicates diminished expectations for rate cuts, which negatively impacts risk assets. Following the announcement, Bitcoin's price dropped significantly.

As of now, BTC is trading around $101,200 as it seeks to recover from its recent losses, while the dollar index maintains strength near its highest level since October 2022, further destabilizing the market.