Key Insights

• Bitcoin’s implied volatility indicates a possible 24-hour price swing of 2.56%, while Ethereum’s is projected at 3.45%.
• Projections for Solana (SOL) and XRP suggest slightly larger price movements.
• The Federal Reserve is anticipated to maintain current interest rates, which could influence market reactions based on comments about economic outlook.

Analyzing Market Volatility

It’s Federal Reserve day, with traders keenly observing potential volatility caused by this significant event. As analyzed by Volmex, leading cryptocurrencies could experience notable price fluctuations, but nothing overly drastic is expected.

Data from TradingView shows the one-day annualized Bitcoin implied volatility index (BVIV) at 49%, predicting a price shift of approximately $2,470, with Bitcoin currently trading around $96,500.

In traditional markets, the daily volatility is derived from annualized figures using the square root of 252. This distinction highlights the 24/7 nature of digital asset trading.

At the same time, Ether’s (ETH) annualized volatility was reported at 66%, suggesting a price movement of 3.45% for the next 24 hours. Moreover, Volmex estimates a 4.3% swing for Solana, albeit there is no volatility index available for XRP. Expected movements for XRP can be inferred from the forward implied volatility based on options listed on Deribit.

At the time of reporting, the forward implied volatility for May 8 stands at 77.98%, indicating a potential daily movement of 4.08%.

The Federal Reserve will disclose its rate decision at 18:00 UTC, followed by remarks from Chairman Jerome Powell at 18:30 UTC. While the rates are expected to remain unchanged, commentary regarding economic conditions in the context of the trade war and a potential rate cut in June could provoke market activity.

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This analysis emphasizes the significance of market indicators and context during pivotal economic announcements, especially for cryptocurrency investors.