Markets Stabilize: What’s Next for Bitcoin and Ether Before the Fed’s Decision

Fears of a pullback for bitcoin (BTC) and ether (ETH) have eased as markets position for the Federal Reserve’s expected rate cut on Sept. 17. Options market data suggest that the next price moves will hinge on the magnitude of the cut.

BTC’s seven-day call/put skew, a measure of implied volatility between bullish and bearish options, has recovered to near zero from a bearish 4% last week, according to Amberdata. Longer-term skews for 30- and 60-day options, while slightly negative, have also rebounded, signaling reduced downside concerns. Ether shows a similar pattern.

Price momentum aligns with this optimism: BTC has gained over 4% to $116,000, while ETH is up nearly 8% to $4,650, according to CoinDesk. CME Fed funds futures price in a 90% chance of a 25-basis-point cut, though a surprise 50-bps move remains possible.

Greg Magadini, Amberdata’s director of derivatives, noted that a larger-than-expected 50-bps cut would trigger a strong “+gamma buy signal” for BTC, ETH, SOL, and gold. If the Fed cuts 25 bps as expected, BTC is likely to continue a steady upward grind, while ETH may need a week or more to retest $5,000.