Bitcoin tests $90,000 ahead of Fed decision as downside hedges remain in demand

Bitcoin briefly tested $90,000 on Wednesday, extending a rebound from last week’s sell-off as traders awaited the Federal Open Market Committee (FOMC) rate decision later today, though demand for downside protection remains elevated. QCP Capital’s January 28 Market Colour said BTC’s reclaim of the $88,000–$89,000 zone is technically important, calling $88,000 a “trap door” level after recent breaks triggered rapid, liquidation-led air pockets; sustained acceptance above that band matters more than brief intraday pushes.

Markets are focused on a cluster of near-term catalysts cited by QCP: the FOMC decision, a January 30 US government funding deadline that keeps shutdown risk alive, and renewed Senate scheduling around crypto market-structure legislation, alongside unsettled FX moves such as USD/JPY rate-check signals.

Options markets show relatively contained headline volatility and a contango term structure, but QCP noted the left tail is bid—negative skew and rich near-dated downside options point to demand for gap-risk hedging. “Calm headline volatility does not equal safety, as traders continue to hedge gap risk,” the firm said.

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