FOMC volatility trending lowerWe observe that BTC’s price action during the two most recent FOMC press conferences has been far less volatile than the norm during the most aggressive hiking cycle from March to September 2022. The chart below illustrates the rolling minutely volatility of BTC amid prior FOMC meetings. The black line highlights that BTC’s reaction to the November and December FOMC press conferences was far softer than during the preceding FOMC press conferences. This could suggest that the trend of massive FOMC-induced volatility in BTC is receding.
Source: CME Group
Nonetheless, the FED’s path remains unclear, with conflicting views on the dot plot. Jerome Powell’s guidance is likely to offer volatile conditions, and traders should expect a volatile Wednesday and FED’s forecast onwards to be important to the near-term directional price path.
Source: Tradingview *Dates included: 2021: Apr 28th, Jun 16th, Jul 28th, Sep 22nd, Nov 3rd, Dec 12th. 2022: Jan 26th, Mar 16th, May 4th, Jun 15th, Jul 27th, Sep 21st, Nov 2nd, Dec 14th