The post Inflation Worry Crushes BTC Bulls Ahead of FOMC appeared on BitcoinEthereumNews.com.

By Omkar Godbole (All times ET unless indicated otherwise) Just a day ago, I highlighted that the bias for protective puts in the S&P 500 options market are painting a cautious picture for risk assets. Fast forward to today, the tide has turned and risk assets, including BTC, are on the defensive. The change in sentiment is more noticeable in the altcoin sector, where ETH, ADA and DeFi coins have taken a bigger hit than BTC’s 5% loss in 24 hours. Expectations for the “alt season” were riding high following altcoin leader ether’s impressive relative to bitcoin since Dec. 20. That excitement is fading fast and here is where it gets interesting: The ETH/BTC forward term structure, calculated as the ratio between prices for ether futures and bitcoin futures over different maturities, has slipped into backwardation, according to data tracked by crypto financial platform BloFin. It means that some of the sharpest minds in the derivatives market are anticipating that ETH and other altcoins will underperform in the coming months. So much for the much-anticipated altcoin dream. While the current degree of backwardation is better than what we saw before the election, it still leaves investors feeling uncertain. BloFin Academy put it best: “it merely suggests that the situation may not get worse.” Speaking of interest rates, traders are now eyeing a less-than-50% probability of a Fed rate cut in March, which doesn’t offer much comfort. The next rate cut is not seen happening before June, the CME’s FedWatch tool shows. This is particularly bearish for ETH, often touted as an internet bond, offering a fixed-income like yield through staking rewards. It’s no surprise that a major momentum study called the “Guppy multiple moving average indicator” is about to flip bearish for ETH. (check the TA section). All of this…

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Filed under: News - @ January 9, 2025 3:22 pm