Bitcoin (BTC) options market flows signal moderate risk aversion ahead of Federal Reserve (Fed) Chair Jerome Powell’s expected remarks on a potential June rate cut Wednesday.

“While the Federal Reserve is widely expected to hold rates steady at this week’s meeting, we have only seen some nuanced demand for protective BTC puts, reflecting limited caution among sophisticated traders,” said Luuk Strijers, CEO of leading crypto options exchange Deribit.

A put option gives the purchaser the right but not the obligation to sell the underlying asset at a predetermined price on or before a specific date. Think of it as an insurance against price swoons. Traders typically buy put options when looking to profit from or protect long spot market positions from market downturns.

Deribit is the world’s leading crypto options exchange, registering billions of dollars in daily trading volume. On Deribit, one options contract represents one BTC.

Strjers explained that the broader options market hasn’t shown a strong directional bias or decisive tilt toward downside hedging.

“Spot BTC has retraced to around $94k, and Deribit’s DVOL, our implied volatility index, sits at 45 — levels we last observed in June 2024. Overall, this suggests a moderate risk-off sentiment, but not yet a panic-driven rush for protection,” Strijers said.

However, traders operating on decentralized exchange Derive.XYZ seemed more cautious and worried about downside risks.

“There’s evidence of downside protection as traders are also purchasing puts at $82K, $78K, and $76K strikes, likely due to concerns over Federal Reserve board meeting that could lead to no rate cuts – or worse, hikes,” Dr. Sean Dawson, head of Research at the leading decentralized on-chain options AI-powered platform Derive.XYZ, told CoinDesk in an email.

Derive, formerly Lyra, is one of the leading on-chain options platform, accounting for over 20% of the total on-chain activity of $1.38 billion in April, according to data source DeFiLlama.

On Wednesday, the Fed is likely to keep the benchmark interest rate steady in the range of 4.25%-4.50%. That’s a foregone conclusion.
At the same time, Powell is likely to maintain the broad data-dependent stance at the post-decision press conference.

However, Powell could be asked about the prospects of a rate cut in June and the economic uncertainty stemming from President Donald Trump’s recent tit-for-tat trade war with China.

The DEX traders’ anxiety likely stems from what Powell could say about the two issues.