Bitcoin (BTC) options flows indicate moderate risk aversion ahead of the expected comments of the Federal Reserve (FED) Jerome Powell on a possible June rate cut on Wednesday.
“While it is widely expected that the Federal Reserve maintain stable rates at this week’s meeting, we have only seen some nuanced demand for BTC protective positions, which reflects a limited caution among sophisticated merchants,” said Luuk Strijers, CEO of the main exchange of the crypto crypto options.
A sales option gives the buyer the right, but not the obligation to sell the underlying asset at a predetermined price on a specific date or before. Think about it as insurance against price symphines. Operators generally buy sales options when they seek to benefit or protect the long market positions from market recessions.
Delibit is the exchange of leading cryptographic options of the world, which records billions of dollars in daily negotiation volume. In Delibit, an option contract represents a BTC.
Strjers explained that the broader options has not shown a strong directional bias or a decisive inclination towards downward coverage.
“Spot BTC has become in relation to around $ 94k, and the Dvol Dvol, our implicit volatility index, is found in 45, levels that we last observed in June 2024. In general, this suggests a feeling of moderate risk, but it is not yet a panic career for protection,” Strixers said.
Dex merchants are charged in the puts
However, merchants operating in Decentralized Exchange Derive.xyz seemed more cautious and worried about downward risks.
“There is evidence of downward protection since merchants also buy $ 82K, $ 78K and $ 76K strikes, probably due to concerns about the meeting of the Federal Reserve Board that could not lead to feat cuts, or worse, Hikes”, Dr. Sean Dawson, head of research of the main decentralized investigation on options for options to the ai platform to COINDESK in an email. In an email.
Derive, previously Lyra, is one of the main chain options in the chain, which represents more than 20% of the total activity in the chain of $ 1.38 billion in April, according to the data source defiliates.
On Wednesday, the FED is likely to maintain the stable reference interest rate in the range of 4.25%-4.50%. That is an inevitable conclusion.
At the same time, Powell is likely to hold the broad data dependent position at the press conference after the decision.
Focus on the June rate cut talk
However, Powell could be asked about the prospects for a rate cut in June and the economic uncertainty derived from the recent Tit-For-OT trade war of President Donald Trump with China.
The anxiety of Dex merchants is probably derived from what Powell could say about the two issues.
Until the release of hotter non -agricultural payrolls last Friday, the markets expected the Fed to reduce rates in a percentage quarter in June. However, the solid jobs report has changed market expectations, since merchants now see only 30% possibilities of a move in June.
“Market participants will closely observe the FOMC meeting next week to see if the Fed provides a strong customers on May 2.
Risk assets, including BTC, can remain under pressure if Powell withdraws strongly against the cut of the June rate, expressing the fears of stagning. You can see a similar reaction if the evaluation of uncertainty in the policy declaration is updated to reflect the developments of the commercial war since April.
Bank of America (Bofa), however, expect Powell to keep the door open for a possible rate reduction in June.
“Powell will probably be asked about the prospects of a June rate cut. The bar for that seems high, since 90 dat pause in reciprocal rates do not finish until July. Still, we do not believe that Powell wants to rule out a June cut,” said Bofa’s global research team in a note to customers on May 2.
“It is easier to say that the Fed depends on the data and the attentive to the risks for both mandates and then let the data speak.”
