UPDATE: A new report from Bybit, the world’s second-largest cryptocurrency exchange, reveals that the recent Federal Reserve rate cut has failed to energize crypto derivatives sentiment. This analysis, conducted in collaboration with Block Scholes, comes just as the Federal Open Market Committee (FOMC) announced a widely anticipated 25 basis point rate cut on December 15, 2025.
Despite the Fed’s optimistic economic outlook, crypto markets remain subdued. In the wake of the announcement, market reactions have been tepid, indicating a cautious atmosphere among traders. Jerome Powell, the Chair of the Federal Reserve, hinted at potential further action in January 2026, yet this has not sparked a significant response in the cryptocurrency sector.
Key findings from the report highlight that open interest in perpetual contracts is still far lower than pre-October levels, with funding rates indicating retail traders are hesitant to re-enter the market. Volatility smiles for both Bitcoin (BTC) and Ethereum (ETH) show bearish patterns, with a remarkable 5 percent premium for out-of-the-money puts compared to calls. This suggests that traders are bracing for further downside rather than anticipating a “Santa rally” this holiday season.
Han Tan, Chief Market Analyst at Bybit Learn, stated, “Crypto bulls still have their work cut out to get any upside momentum going,” emphasizing that the market’s reaction to the FOMC meeting starkly contrasts with global equities, which surged to new record highs. The report underscores a lack of significant catalysts to drive a late-year resurgence, with BTC’s price still sitting 28 percent below its all-time high.
As we move toward year-end, traders are showing a limited appetite for re-engagement with leverage. The options markets reflect ongoing caution across both short and long horizons, suggesting that expectations for a rebound are tempered. Market participants are closely monitoring upcoming U.S. jobs reports and inflation data, which may further influence crypto sentiment.
For those looking to explore the full insights from the report, it is available for download. As the cryptocurrency landscape remains dynamic, the implications of the Federal Reserve’s policies are crucial for traders and investors alike.
Stay tuned for further updates as the situation develops.
