While the FED's interest rate decision is expected today in Bitcoin, the probability of no interest rate increase on September 20 is priced at 99%, according to CME Group's FED Watch tool.
While expectations are for interest rates to remain constant, some experts warn investors that the Bitcoin price may move sharply in both directions, up and down, after the interest rate decision and that leveraged transactions should be avoided.
However, some experts also said that low volatility may continue after the FED's decision and investors expecting high volatility in the BTC price may be disappointed.
Speaking to Coindesk at this point, Amberdata manager Greg Magadini stated that he expects the FED to keep interest rates constant between 5.25% and 5.5% and not present any surprises to the market by maintaining its long-stated “data-driven stance”.
“The Fed has been very determined to remain 'data driven' and has signaled it may keep interest rates high for longer.
To me, this means that the Fed will leave interest rates unchanged at its meeting this week, but will signal that interest rates will remain high.
“In addition, I think this situation will continue low volatility and will disappoint investors who expect high volatility in the BTC price.”
Evaluating Bitcoin options that will expire on Friday, Matrixport research head Markus Thielen said that the options show that BTC cannot move more than 3% after the FED decision.
“Based on Bitcoin options market pricing, traders expect BTC to move only 2.8% this Friday.
“This is a sign that no one expects any market-moving comments from FED Chairman Powell.”
As is known, the FED has constantly maintained that its decision on interest rates will depend on incoming inflation and employment data and has avoided signaling that the interest rate hike cycle, which started in March last year, has completely ended or will end.
At this point, the FED is expected to repeat the same message regarding interest rates.
*This is not investment advice.