The crypto derivatives market is showing signs of caution as traders prepare for key U.S. economic data.
With the Federal Open Market Committee (FOMC) minutes and October Core Personal Consumption Expenditures (PCE) inflation data on the horizon, Bitcoin and Ethereum are experiencing sentiment shifts reflected in changes in option implied volatility.
PCE data will be released tomorrow, while FOMC minutes will be released today at 22:00 Turkish time (UTC+3).
QCP Capital analysts noted a significant move in Ethereum’s implied volatility, shifting sharply from buying to selling, indicating growing concern over potential downside risks. “A similar sentiment can be observed in Bitcoin as the market takes a breather,” the analysts wrote.
Broader financial markets are also reflecting a subdued outlook, with the Dow and S&P 500 futures both down 0.02%. Bitcoin is currently trading around $93,000, with traders appearing to be consolidating positions after weeks of strong performance. “Despite the pause, the fundamentals remain solid and we expect accumulation around the $95,000 level before the next rally begins,” BRN analyst Valentin Fournier commented.
Ethereum, meanwhile, has fallen more than 5% in the past 24 hours to trade around $3,300. Data from Deribit shows the put-call ratio for Ethereum options has risen to 0.74 for end-November expiration, suggesting increased caution. This reflects broader market sentiment heading into the end of the year, with limited immediate catalysts for a strong recovery, analysts at QCP Capital said.
The FOMC minutes, due later today, will be a focal point for traders. They will shed light on the discussions by Fed policymakers and their views on the progress of inflation after the 25 basis point rate cut in November. Since then, Fed officials have raised concerns that the pace of inflation is slowing, adding to market uncertainty.
In addition to the week's highlights, tomorrow's October Core PCE inflation report will provide further insight into inflation trends.
*This is not investment advice.
