Investor anxiety surrounding the potential downturn of Bitcoin (BTC) and Ether (ETH) has significantly diminished, revealing a more optimistic outlook ahead of the anticipated Federal Reserve rate cut on September 17.

According to recent data from Amberdata, BTC’s seven-day call/put skew—a measurement of market sentiment—has dramatically bounced back to nearly neutral from a bearish 4% just a week ago. Meanwhile, the 30- and 60-day option skews, although still slightly negative, have also shown recovery, indicating a decline in downside apprehension for Ether.

These skews illustrate traders' perspectives on market trends, with a positive skew suggesting an inclination towards bullish plays and a negative one reflecting heightened concerns about potential price declines.

As Bitcoin and Ether prices experience an uptick ahead of the Fed's decision, Bitcoin has surged over 4% in the past week, climbing above $116,000, while Ether has almost reached $4,650 with an 8% rise, as per CoinDesk.

The future trajectory of these cryptocurrencies rides on the magnitude of the forthcoming Fed rate cut. Current predictions from CME's Fed funds futures indicate a more than 90% likelihood of a 25 basis point reduction to 4%-4.25%. However, whispers of a surprise 50 basis points cut could send markets into a frenzy.

Greg Magadini, director of derivatives at Amberdata, emphasized that a shocking 50 basis point cut would trigger a major buy signal for Bitcoin, Ether, and Solana (SOL). He ominously added that gold prices would likely soar in response.

On a positive note, Solana options listed on Deribit are already reflecting strong bullish sentiment, with calls trading at a notable premium over puts.

Should the Fed stick to the expected 25 basis point cut, analysts predict that Bitcoin might continue its steady ascent. Meanwhile, Ether may require more time—potentially a week or so—to challenge its all-time high and confidently break above the $5,000 mark.