Bitcoin Bulls Face Off Against Fed Rate Decision and Crypto Legislation Vote
Bitcoin bulls are back after months of gloom, but a Federal Reserve rate decision this week will test that optimism. The world's largest cryptocurrency rebounded past $70,000 in late August as surging Treasury yields briefly retreated and broader sentiment improved.
The rally marked a sharp turnaround for bitcoin, which had slumped roughly 50% from its October 2025 peak of above $126,000. Although traders are assigning almost no chance of bitcoin rescaling that peak, the bitcoin options market has flipped bullish for the first time in 12 months.
Many investors believe bitcoin has hit its lowest ebb and can sustain momentum despite headwinds from tensions in the Middle East, low odds of a key crypto bill passing, and elevated inflation. 'BTC was in oversold territory for some time,' said Matthew Dibb, chief operating officer of Singapore-based crypto investment manager Stack Funds.
The 25-delta skew, which compares demand for bullish call options against protective put options, turned positive on August 20, indicating a premium to buying upside calls. Open interest for the December 25 expiry is clustered at the $80,000 strike, with about $710 million in notional value.