Bitcoin recovered to the level of 88 thousand dollars after the sharp sales wave in the first part of the week. However, the level in question has been working as both a technical and psychological threshold in the market lately. The Fed decision to be announced today in the USA, the budget financing deadline on January 30, and the Senate calendar for crypto markets have brought crypto assets to the center of a busy macro agenda. The stress on the USD/JPY front in the foreign exchange markets keeps the risk appetite fragile.
Asymmetry in Bitcoin Pricing and the Message of the Options Market
It is noteworthy that in every attempt where Bitcoin falls below 88 thousand dollars, rapid gaps occur due to liquidation, and in upward attempts, the price is pulled back to the narrow band. While this structure increases volatility in short-term transactions, it also prevents the formation of a clear trend in direction. It is not considered a coincidence that pricing was locked at this level before the US Federal Reserve’s interest rate decision on January 28.
The options market clearly reflects this uncertainty. While volatility remains relatively low, the maturity structure still appears to be in contango, indicating that the main scenario is a fluctuating course rather than a sharp collapse. On the other hand, the maintenance of negative skew and the fact that short-term downside options remain expensive reveal that investors are looking for protection against the risk of sudden decline.
For market professionals, low volatility alone is not a sufficient justification for risk selling. Current pricing points to a balance in which positioning against gap risk comes to the fore rather than the trend.
Fed Decision, Washington Agenda and Liquidity Risk
Another decisive headline for crypto markets is the federal financing period, which will expire on January 30 in the USA. Congress reaching a short-term compromise could reduce risk premiums and allow crypto assets to trade more on macro beta. A short-term disruption may create a temporary risk escape and produce a pricing that can be reversed after the agreement.
A prolonged budget crisis scenario may have more serious consequences. Such a scenario could tighten liquidity, putting not only the cryptocurrency market under pressure but also the broader universe of risky assets. The agenda regarding the structure of the cryptocurrency market in the Senate again keeps political uncertainty alive.
On the Fed side, the main expectation is to keep interest rates constant. The fact that inflation is above the 2 percent target and the softening in the employment market keeps the Committee in a cautious and data-dependent stance. In an environment where discussions on the independence of the Central Bank continue, the possibility of a sudden dovish message seems slim. This situation may lead to a strengthening of the dollar and fluctuations in risky assets in the short term.
