The crypto market is in a buoyant mood ahead of Wednesday's Federal Reserve interest-rate decision.

The overwhelming expectation is that the Fed will cut rates by 25 basis points, a move seen as favorable to risk assets like bitcoin BTC$92,026.25.

BTC is trading at $92,300 having risen by 2.3% in the past 24 hours. Ether ETH$3,308.55 outperformed bitcoin with a 7% gain.

Interest-rate decisions often create volatile trading sessions and, while a 25 bps rate cut can be perceived as bullish, there is a scenario where traders decide further gains are unlikely and sell once the news is released, effectively pushing prices down and trapping others in overpriced long positions.

Bitcoin has formed a trading range between $88,000 and $94,500 over the past week. A break of either one of those levels will indicate the direction of future moves.

Derivatives positioning

• Volmex's one-day bitcoin implied volatility climbed to 67% from 20%.
• The latest reading implies an expected 24-hour price swing of 3.5%, which is now out or ordinary. That means the Fed meeting is not seen having an outsized impact on the market.
• ETH eyes a 4.6% move, while SOL and XRP are projected at 5%.
• BTC's options-based implied volatility term structure is slightly inverted, with volatility at the front-end pricier than at the long-end. Should the Fed decision turn out to be dud, the curve could rapidly normalize.
• On Deribit, BTC and ETH puts remain pricier than calls. Block flows over past 24 hours featured ETH strangles and straddles, a sign of traders are positioning for volatility. For BTC, traders chased risk reversals.
• In futures, open interest (OI) has increased in most major tokens, with ether rising 8% to 12.4 million ETH, a level not seen since Dec. 2.
• Cardano open interest briefly rose to 1.80 billion ADA, the highest since Oct. 10, and recently at 1.71 billion ADA.
• BCH, XMR, WLFI have deeply negative annualized funding rates, a sign of traders chasing bearish, short positions.
• On the CME, OI in ether futures has risen back above 2 million ETH, while positioning in BTC remains at multimonth lows.

Token talk

• With the exception of ether, which is gaining attention following last week's Fusaka upgrade, the altcoin market continues to lag.
• CoinMarketCap's "altcoin season" indicator is printing 16/100, a cycle low and a stark contrast to September's reading of 78/100.
• One reason for this could be traders preferring larger market cap tokens like bitcoin and ether as there is more liquidity and thus less volatility ahead of an event like the U.S. interest-rate decision.
• Over the past week, derivatives token HYPE has been one of the worst performers, losing 15% of its value. STRK, KAS and APT have also been dealt double-digit moves to the downside.
• The AI-focused token FET was one of the top gainers over the past 24 hours, rising by 9.3% as it rebounds from a recent slide. It remains heavily deflated on higher time frames though, having lost 1.6% over the past week to compound a year-to-date decline of more than 80%.