The crypto market fell Tuesday, losing early week momentum and eroding gains. Bitcoin BTC$90,311.23 currently trades at $90,150, down from Monday's high of $92,350. The CoinDesk 20 Index (CD20) has lost 2.1% in 24 hours with all members declining.

The price action mirrors last week's performance when bitcoin rallied from $86,300 to $93,200 between Sunday and Tuesday before dropping back to $88,000 in the latter half of the week.

This week, the difference is Wednesday's Federal Reserve interest-rate decision, with the market overwhelmingly predicting a 25 basis-point cut. Reductions are generally perceived as bullish for risk assets like cryptocurrencies because the dollar becomes less valuable to hold.

But the probability of a rate cut has been high for weeks, meaning that eventuality is likely to be priced in already. If that's the case, risk assets could sell-off on the news because it would mean there are no more bullish catalysts for the rest of the year.

Derivatives positioning

• The market shows no signs of pre-Fed jitters with BTC and ETH 30-day implied volatility indexes, BVIV and EVIV, holding steady.
• On Deribit, activity is seen in the June expiry puts at strikes as low as $20,000 and calls above $200,000. These are mostly likely bullish volatility plays and not price directional trades.
• Overall, BTC and ETH puts remain pricier than calls, with block flows featuring risk reversals and put diagonal spreads in bitcoin.
• In ETH's case, flows included call spreads and risk reversals.
• As for futures, most major tokens, including BTC and ETH, have seen a decline in open interest (OI). In BCH's case the drop was 8%.
• ZEC's OI has risen by 16% to 2.30 million ZEC, coming close to the record 2.32 million ZEC on Dec. 4.

Token talk

• The altcoin market continues to recess, with several tokens underperforming bitcoin as investor appetite for speculative assets plunges to cycle lows.
• HYPE lost 8.6% in 24 hours while STRK, QNT and KAS are down 5.7%-6.3%.
• CoinMarketCap's "altcoin season" indicator is also resting at cycle lows of 18/100, a far cry from Sept. 20, when it topped 78/100.
• Over the past 90 days bitcoin has dropped by around 20%. Still, that's dwarfed by the altcoin sector, with more than half of the top-100 tokens by market cap sliding in excess of 40%.
• The worst-performing tokens include AI-focused FET, which is still reeling from a public spat with Ocean Protocol and accusations of token sales, and TIA$0.5793, which has tumbled 67% in 90 days following a round of layoffs and a lack of any onchain activity.
• A handful of tokens have bucked the bearish trend, notably privacy coins zcash ZEC$409.26 and dash DASH$47.69, and a deserved mention goes to BNB and BCH$574.07, which have stayed relatively flat despite the broader market weakness.