Bitcoin Tests $90,000, Yet Downside Protection Stays Bid Into Fed and Funding Risk

Bitcoin briefly reclaimed the $90,000 level following a sharp sell-off, but analysts caution this offers only temporary relief as significant macro and policy risks loom. Key concerns include the upcoming Federal Open Market Committee (FOMC) rate decision, a US government funding deadline raising shutdown risks, and stalled crypto legislation in the Senate. Options markets show that while headline volatility is contained, demand for downside protection (negative skew and rich near-dated options) remains high, indicating traders are hedging against gap risk rather than expecting a smooth rally. Furthermore, markets have priced in a more hawkish Federal Reserve outlook, with expectations for rate cuts diminished. Bitcoin has also developed a negative correlation with surging US equities, and a potential stock correction could worsen BTC's price action. Analysts suggest that meaningful sentiment improvement requires a clear policy catalyst, such as progress on the CLARITY Act, but until then, markets remain positioned for volatility despite the temporary price recovery.

(Source：BeInCrypto)