Fed Cuts Rates by 25 Basis Points, Crypto Market Remains Cautious

News Flash 2025-12-11 10:47

The Federal Reserve has cut interest rates by 25 basis points and announced the purchase of $40 billion in short-term U.S. Treasury bills, aiming to enhance liquidity in the financial system. While this dovish move is seen as a positive for markets, the crypto sector remains cautious about a bull market resurgence, especially with the holiday season approaching, traditionally a period of low liquidity. Crypto options data indicates that over 50% of positions are set to expire by the end of December, with Bitcoin's key pain point at $100,000 and Ethereum's at $3,200. Implied volatility for major terms is declining, reflecting reduced expectations for market fluctuations this month. Notably, the skew has shown a persistent negative bias, with put options priced higher than calls of the same delta, driven by a stable market favoring covered call strategies and increased demand for protective puts amid market weakness. Overall, the crypto market is experiencing low liquidity and subdued sentiment, with a slow decline being the prevailing outlook. However, traders remain vigilant for any unexpected positive developments that could trigger a market reversal, despite the low probability.

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