Well, it looks like the mood in the crypto options market has shifted pretty dramatically over the past week. The constant fear of a sharp drop in bitcoin and ether prices seems to have faded, at least for now. That’s the main takeaway from the latest data tracking trader sentiment.
But of course, nothing is ever simple. The next big move—and how fast it happens—really depends on what the Federal Reserve does next week.
Options Data Shows a Calmer Market
According to numbers from Amberdata, a key measure of market fear for bitcoin has basically returned to neutral. They look at something called the seven-day “call/put skew,” which is a fancy way of gauging whether traders are more worried about prices going up or down. A week ago, it was sitting at a negative 4%, suggesting people were buying protection against a fall. Now, it’s near zero. That’s a significant change.
The longer-term outlook isn’t completely bullish, but it’s getting there. The 30- and 60-day skews are still a bit negative, but they’ve definitely improved from their recent lows. Ether is apparently following a very similar pattern. It seems the panic has subsided.
All Eyes Are on the Fed Now
This shift in sentiment isn’t happening in a vacuum. Prices for both BTC and ETH have been climbing again as everyone waits for the Fed’s decision on September 17th. The widespread expectation is for an interest rate cut. Bitcoin’s up over 4% in the last seven days, and ether has jumped nearly 8%. The market is clearly positioning itself for a dovish move.
The real question is about the size of that cut. The market has almost entirely priced in a standard 25 basis point reduction. That’s seen as the base case. But there’s also this faint, lingering chance of a bigger, 50 basis point cut. And that’s where things could get really interesting.
The Possibility of a Surprise
If the Fed goes with the expected quarter-point cut, the thinking is that bitcoin might just continue a slow, steady climb higher. Greg Magadini from Amberdata suggested ether might need another week or so to really challenge its previous all-time high above $5,000. A predictable outcome, perhaps.
But a surprise 50 basis point cut? That would be a different story entirely. Magadini called it a “massive +gamma BUY signal” for the major cryptocurrencies, noting that even gold would likely surge. It would be a shock to the system, a clear signal that the Fed is seriously concerned about the economy and is willing to act aggressively. In that scenario, all bets are off. The reaction would probably be violent and immediate.
It’s worth noting that this bullish potential isn’t just theory. Look at options for Solana’s SOL, for instance—they’re already showing a strong preference for calls over puts. The groundwork for a big move is there. Next Wednesday will tell us which path we’re on.
