Bitcoin, Ether, Solana Likely to See 3%-5% Price Swings on FOMC Rate Decision, Volmex Data Suggests

While these figures might seem concerning for equity or currency traders, they do not represent a significant deviation from the usual volatility in the crypto market.

Key Points:

• The Federal Open Market Committee will release its rate review, growth and inflation projections, and interest rate forecast, which could lead to 3% to 5% price swings in Bitcoin, Ether, and Solana.
• The central bank is anticipated to keep the benchmark borrowing rate unchanged and indicate the conclusion of its extended quantitative tightening program.

The Federal Open Market Committee (FOMC), the U.S. Federal Reserve's monetary policy-making body, is set to release its rate review, along with growth and inflation projections and an interest rate forecast later today.

This highly anticipated event is expected to generate crypto market volatility, potentially triggering 3% to 5% price swings in Bitcoin (BTC), Ether (ETH), and Solana (SOL), according to Volmex's one-day implied volatility indices for these assets.

At 12:30 UTC, the Bitcoin one-day implied volatility (IV) index (BVIV) indicated an annualized volatility of 63.32%, which translates to an expected 24-hour price swing of 3.31%. This daily move is calculated by dividing the annualized figure by the square root of 365, the total number of trading days in a year.

Similarly, the volatility indices for Ether and Solana predicted 24-hour price swings of 5.25% and 5.73%, respectively.

While these figures might be alarming for equity or currency traders, they don't represent a significant deviation from typical volatility in the crypto market. In other words, while the Fed event is important, it is unlikely to trigger an immediate surge in volatility.

The central bank is widely expected to maintain the benchmark borrowing rate while signaling the end of its extended quantitative tightening program. However, any gains in risk assets may be limited by a potential stagflationary adjustment in the summary of economic projections.