Prepare For Volatility: Data Suggests Bitcoin Hets Chaotic During FOMC Meetings
21 September 2022 - 07:00PM
NEWSBTC
Bitcoin and other cryptocurrencies in the market have had an
interesting week-and-a-half. From the CPI report to the completion
of the Ethereum Merge, it has been a rollercoaster of volatile
activity across the market. Even with this, the market is still not
done with its big events. The FOMC meeting is held on Wednesday,
which, like in the past, promises unpredictable movements for the
crypto markets. Expect Volatility For Bitcoin The FOMC meeting has
always triggered volatility across not just the crypto markets but
various financial markets. Bitcoin’s reaction to the FOMC meeting
has also gotten more prominent with the increased correlation with
the stock and macro markets. Given this, any FOMC meeting is
expected to have a significant impact on the crypto market.
Related Reading:
https://www.newsbtc.com/altcoin/ethereum-proof-of-work-ethw-gains-30-is-more-upside-coming/
This is no different from the FOMC meeting that is happening on
Tuesday. Previously, the FOMC meeting hours have been very volatile
in the space as the market awaits the results of the meeting. As
such, it is expected that Wednesday will see a lot of volatility,
especially during meeting hours. More specifically, volatility is
expected to hit its peak between 17:00-21:00 UTC as had been
observed during previous meetings. Volatility expected during FOMC
meeting | Source: Arcane Research Naturally, bitcoin’s price will
respond to the equity indexes during this time and will tend to
move in tandem with it. So while investors keep an eye on the
crypto market, it will be prudent to also keep an eye on the macro
markets during this time as well. High Swings In Crypto The
reaction of bitcoin and other cryptocurrencies can vary during this
time but the wild swings are to be expected. This time around, the
volatility is also expected to be very high because there is
uncertainty across the markets regarding if there will be further
rate hikes or not. It actually gives an idea of the importance of
the FOMC meeting to different financial markets and now the crypto
market, as it becomes a larger contender. Presently, there are
reports of an expected rate hike of 100bps. The market has reacted
to this by pricing a 20% chance of such a hike. BTC remains below
$20,000 | Source: BTCUSD on TradingView.com Interestingly, the
volatility from the FOMC meeting does not seem to last beyond the
end of the meeting. In some cases, it has lasted a few hours more,
but by the next day, the volatility usually settles and normalizes.
Related Reading: Bitcoin Price Recovers Above $19,000, But Is The
Onslaught Over? So, in the end, the volatility from this meeting
does not command much relevance over a longer period of time. It
often acts as a clue for traders regarding how trades should be
constructed during this time. If rate hikes continue though,
bitcoin’s price may break below $18,000 for the second time this
year. Featured image from Yahoo Money, charts from Arcane Research
and TradingView.com Follow Best Owie on Twitter for market
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