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Crypto traders initial worries about a hawkish Fed materialized Wednesday as Chairman Jerome Powell cut interest rates but expressed uncertainty about the speed and extent of future easing. And now the sentiment has deteriorated.

Bitcoin's seven-day call-put skew shows that Deribit-listed put options offering downside protection and expiring in one week are trading at the highest implied volatility premium to call options since September, according to data source Amberdata. In other words, put options are the most expensive relative to calls in three months.

Its a sign of traders scrambling to hedge their bullish bets against a potential continuation of Wednesday's price slide, triggered by a hawkish Fed.

The dour sentiment is also evident from the negative one-month skew, reflecting a bias for puts and a significantly weaker call bias in options ranging from two to six months. These calls traded at a 3 vol premium to puts at press time, down from the 4-5 vol premium observed early this month.

On Wednesday, the Fed cut the benchmark interest rate by 25 basis points to the 4.25% to 4.5% range. That's 100 basis points lower than the September levels when it began the easing cycle.

Bitcoin declined following the rate cut, as Fed Chairman Jerome Powell described it as a close call and emphasized caution regarding future moves as rates approach the neutral level .

Powell also said that the Fed has no intention of participating in any government plan to create a strategic bitcoin reserve, adding that board members do not intend to push for changes to the Fed law. This comes after President-elect Trump's recent mention that his administration would consider establishing a BTC reserve similar to the country’s oil stockpile.

Meanwhile, the dot plot, an anonymous graphical representation of where the 19 committee members project the fed funds rates will be in the future, signaled only two rate cuts in 2025 instead of three expected and down from four in September.

The dot plot essentially out-hawked the markets, sending risk assets lower. While Dow Jones ended bled 2.5% or over 1,000 points, BTC slipped from roughly $105,000 to under $99,000, according to data source TradingView and CoinDesk.

As of this writing, BTC is trading at around $101,200, aiming to recover from overnight losses.

Meanwhile, the dollar index, which gauges the greenback's value against major currencies, continues to hold on to its overnight gains, holding steady near 108, the highest level since October 2022. A persistent strength in the USD could add to risk assets' woes.