It’s Fed Day again, a pivotal event for traders as they seek insights into potential market volatility. According to Volmex’s implied volatility indices, major cryptocurrencies are expected to experience price swings, although nothing out of the ordinary is anticipated.
At the time of writing, Volmex’s annualized one-day Bitcoin implied volatility index (BVIV) is at 49%, translating to an expected 24-hour price swing of approximately 2.56%. This means that Bitcoin could fluctuate by around $2,470 in either direction, with its current trading price hovering around $96,500.
The calculation of expected daily volatility in percentage terms is derived by dividing the annualized percentage by the square root of 365. This approach is notable in the digital asset market, which operates continuously, unlike traditional markets where the conversion relies on a 252-day basis.
In addition to Bitcoin, Ethereum (ETH) is exhibiting an annualized one-day volatility of 66%, which implies a potential price swing of 3.45% in the next 24 hours. Solana’s SOL token is also demonstrating significant volatility, with a projected one-day move of 4.3% according to Volmex’s indices.
While Volmex does not release volatility indices for the payments-focused cryptocurrency XRP, insights can still be obtained from the forward implied volatility (IV) derived from options listed on Deribit. The forward IV for May 8 is reported to be 77.98%, indicating a one-day expected move of 4.08%.
The Federal Reserve is scheduled to announce its interest rate decision at 18:00 UTC, followed by a press conference led by Chairman Jerome Powell at 18:30 UTC. While the central bank is expected to maintain steady rates, commentary regarding the economic outlook amid the ongoing trade war and potential considerations for a rate cut in June could stir market movements.
Traders are advised to remain vigilant as these developments unfold, preparing for the potential implications on the cryptocurrency market as they relate to broader economic indicators.
