Bitcoin Treads Water After Fed Cut as Altcoin Slump Deepens

The crypto market remained choppy on Friday with bitcoin BTC$92,403.82 having spent the past seven days pinned between $88,000 and $94,000 in a week dominated by the Federal Reserve’s decision to cut interest rates by 25 basis points.

Interest-rate reductions are typically seen as bullish catalysts for risk assets like bitcoin as investors are less incentivized to hold fiat currencies like the dollar, thus searching for returns elsewhere.

But neither bitcoin nor the broader crypto market behaved as expected, with BTC tumbling to below $90,000 after the cut before rising back to the upper side of the range. The CoinDesk 20 Index is up 0.57% since midnight UTC.

The altcoin market remains relatively weak as several tokens including JUP$0.2134, KAS$0.04680 and QNT$81.83 have faced double-digit declines this week.

Derivatives positioning

• BTC’s 30-day implied volatility, represented by Volmex’s BVIV index, continues to decline, falling to its lowest since Nov. 10. Traders seem to be anticipating choppy price action in final weeks of 2025.
• The ether volatility index has dropped to the lowest since late October.
• On Deribit, BTC and ETH put bias remains intact across all time frames.
• Block flows featured a bias for calendar spreads in BTC and ETH.
• In futures market, ZEC’s open interest (OI) has surged by 16% to 2.28 million ZEC, nearing the record high of 2.32 million ZEC.
• HYPE, SUI and SOL have also seen notable increases in OI over 24 hours, indicating renewed capital inflows. OI has held largely flat in BTC and ETH.

Token talk

• Privacy coins continue to be the top performers of the altcoin market as zcash ZEC$455.74 led the way with a 9% gain over the past 24 hours.
• There were also notable intraday recoveries for AAVE, HYPE and LIDO, but performance over the past week remains muted.
• CoinMarketCap’s “altcoin season” indicator is now at a cycle low of 16/100, a sign that traders are declining to turn to the speculative altcoin market.
• The chronic underperformance is demonstrated by CoinDesk’s Memecoin Index (CDMEME), which is down by 59% year-to-date in contrast to the CoinDesk 10 (CD10, which has lost 7.3%.
• The demise of the memecoin market, once the bedrock of hype-driven crypto speculation, indicates a change in investor profile behavior over the past year.
• While the market used to be dominated by retail investors, the rise of ETFs and digital asset treasury (DAT) companies has knocked that demand to one side; replacing it with slow and steady price action.