The Federal Open Market Committee (FOMC) is set to release its latest interest rate decision today, accompanied by updated projections for economic growth, inflation, and interest rates. The announcement, a key event for financial markets, is expected to trigger price swings of 3% to 5% in major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), according to Volmex’s one-day implied volatility indices.
Crypto Volatility Forecast Ahead of Fed Decision
As of 12:30 UTC, Bitcoin’s one-day implied volatility index (BVIV) stood at 63.32% annualized, suggesting an expected 24-hour price move of 3.31%. Similarly, ETH and SOL volatility indices projected daily swings of 5.25% and 5.73%, respectively.
While these figures may appear extreme to traditional equity or forex traders, they fall within the normal range for the crypto market. Thus, despite the Fed’s policy review being a crucial event, it is unlikely to result in a dramatic surge in volatility.
Fed Policy Expectations and Market Impact
The Federal Reserve is widely anticipated to maintain its benchmark interest rate at current levels while signaling the conclusion of its prolonged quantitative tightening program. However, any gains in risk assets, including cryptocurrencies, could be moderated by potential stagflationary concerns reflected in the Fed’s economic projections.
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