The Federal Reserve’s upcoming meeting is stirring anticipation in the cryptocurrency market, with traders eyeing potential price swings in Bitcoin, Ethereum, Solana, and XRP. According to implied volatility indices, Bitcoin might see a 2.56% swing, while Ethereum could experience a move of 3.45%. The overall sentiment is cautious, as traders prepare for the Fed’s decision to likely keep rates unchanged, yet any economic commentary could impact market dynamics.
As the cryptocurrency market braces itself for the Federal Reserve’s anticipated policy meeting, traders are left wondering just how much volatility this might spark in major tokens like Bitcoin, Ethereum, Solana, and XRP. Implied volatility indices from Volmex hint at potential price movements, though not overly dramatic swings are expected.
Currently, Bitcoin’s implied volatility stands at 49%, leading to an expected 24-hour price fluctuation of about 2.56%, translating to a possible move of around $2,470. This estimation comes as Bitcoin prices hover close to $96,500. The formula used arrives at these numbers by taking the annualized percentage and dividing by the square root of 365, reflecting the market’s always-open nature versus traditional markets which typically operate on 252 days.
Ethereum follows closely behind with an annualized one-day volatility estimate of 66%. This suggests a projected price swing of approximately 3.45%. Meanwhile, Solana’s SOL token hints at a 24-hour move of 4.3%, according to the same Volmex indices.
When it comes to XRP, things get a bit trickier. Volmex does not provide specific volatility indices for this payments-focused cryptocurrency. An alternative gauge for its expected move comes from the forward implied volatility based on options listed on the Deribit exchange. As of now, the forward IV for May 8 rests at 77.98%, equating to a 4.08% expected move for XRP.
The much-anticipated announcement from the Federal Reserve comes at 18:00 UTC, with Chairman Jerome Powell set to provide further insights during his press conference at 18:30 UTC. The prevailing expectation is for the rates to remain steady. However, any comments addressing the economic outlook amid ongoing trade issues or hints about a possible rate cut in June could create substantial market ripples.
Omkar Godbole, a Co-Managing Editor on CoinDesk’s Markets team, provides context around these movements. Based in Mumbai, he holds a master’s degree in Finance and has a strong background in currency markets. Godbole notes that while all eyes are on the Fed, the market’s reaction can be unpredictable, and traders will need to stay sharp.
With volatility looming and uncertainty in the air, traders remain alert, prepared for potential shifts in the crypto landscape, all hinging on the Fed’s next steps.
