Bitcoin (BTC) Options Traders Turn Bullish After Fed Meeting, Ethereum (ETH) Lags

Bitcoin (BTC) options traders are shifting towards bullish bets following the Federal Reserve’s latest policy decision, while Ethereum (ETH) options

Bitcoin (BTC) options traders have become more bullish following the latest Federal Reserve policy decision, shifting their bets towards price gains. In contrast, traders holding Ethereum (ETH) options remain more cautious despite the upcoming Pectra upgrade.

The past week saw a crucial turning point in Bitcoin options sentiment. Both the short- and long-term risk reversals, which highlight the demand for call options (bullish) versus put options (bearish), flipped into positive territory. This shift signifies that investors are now placing more wagers on Bitcoin's price increasing.

Prior to the Fed meeting, Bitcoin options displayed a bearish bias, with puts, or options that pay out when the underlying asset's price falls, being more expensive than calls, which pay out when the price rises. However, a pivot in the options market occurred as investors began buying BTC calls for the March 21 and March 28 expiry dates, an observation also noted by Paradigm in its latest institutional trading report.

According to Paradigm, 28 March put options were sold while we observed "active buying pressure for any near-term calls."

The change in Fed policy also supports a bullish outlook for Bitcoin. The central bank maintained its projection of two rate cuts in 2025, reducing fears of aggressive monetary tightening. Moreover, Chairman Jerome Powell downplayed concerns over inflation caused by Trump’s trade tariffs, calling the impact “transitory.”

Furthermore, the Fed will be slowing the balance sheet runoff starting April, a factor that could promote more favorable liquidity conditions, which has historically been beneficial for Bitcoin.

In addition to Bitcoin, the crypto market is also coping well with the conclusion of the SEC case against Ripple, which is likely to support broader market confidence.

While Bitcoin options have become bullish, traders holding options on Ethereum are still more bearish, with puts remaining pricier than calls despite the Pectra upgrade, a major network update, set for March 26. This behavior suggests that traders are still keen on hedging downside risks in ETH and altcoins, displaying skepticism despite the Pectra upgrade.

Pectra is expected to introduce key enhancements such as smart accounts, blob scaling, and validator UX improvements, yet ETH derivatives traders are keeping a defensive posture.

As the leading altcoin, weaker sentiment in Ethereum may be dragging down the broader market.

With Bitcoin options flipping bullish and the Fed policy favoring risk assets, BTC appears positioned for further gains. However, traders holding options on Ethereum remain more cautious, likely waiting for stronger fundamental catalysts before turning bullish. As the Pectra upgrade approaches and macro conditions stabilize, we might see a shift in ETH options traders' sentiment. For now, Bitcoin continues to take the lead in the crypto market recovery.