Bitcoin volatility spikes on classic FOMC trading day Coinstar

Bitcoin (BTC) gave back recent gains on Wednesday as traders anticipated bullish moves around the Federal Reserve’s interest rate announcement.

Key points:

• Bitcoin fails to sustain its recent $94,500 rally as nerves follow the Fed’s interest rate decision.

• Traders are bracing for unreliable moves either way around the FOMC.

• Japan-focused risk asset volatility is already on the horizon as the next key issue.

Bitcoin Price Oscillations Ignore Annual Opening

Data from Cointelegraph Markets Pro and TradingView showed that BTC’s price trajectory was headed lower at the Wall Street open.

Having reached $94,650 a day earlier, BTC/USD failed to hold higher levels, including the 2025 annual open.

At the time of writing, the pair was trading around $92,000 as market participants anticipated unreliable price maneuvers around the rate announcement and press conference.

“FOMC meetings can be quite tricky,” crypto trader, analyst and entrepreneur Michaël van de Poppe wrote on X.

“Price action usually captures everything before the real move, so even if Bitcoin falls to $91,000, I don’t put too much weight on it.”

Trader Daan Crypto Trades noted that the exchange’s order books lacked major clusters of liquidity on either side of the post-rise price.

“$BTC took out the $93K-$94K liquidity cluster as mentioned yesterday. This was the most logical place to go from a liquidity perspective. Once that is taken out, there is no major area in the immediate vicinity,” he told X followers with data from tracking sources CoinGlass.

“But as the price is consolidating now, we may see some clusters building around the $90K and $95K levels.”

As reported by Cointelegraph, markets have already seen the overwhelming likelihood that the Federal Open Market Committee (FOMC) will cut rates by 0.25%. The outlook for Fed Chairman Jerome Powell’s future policy, however, remained uncertain.

“The rate decision is almost fully priced in, but the real focus will be on Powell’s tone,” trading firm QCP Capital explained in its latest “The color of Asia” market update on the day.

“With little new data since the last meeting, the Fed is unlikely to signal a move in advance in January, leaving traders to dissect every nuance of the press conference.”

Japan brings back the famous crypto risk

Continuing, QCP said that after the FOMC reaction, risk asset traders will shift their focus to Japan, with its bond market in unusual territory.

Related: Retail Bitcoin Inflows on Binance ‘Collapse’ to Record Low 400 BTC in 2025

“The BOJ meeting on December 19 has become the next big risk event,” it explained.

“JGB yields are at multi-decade highs, with the 10Y near 1.95%, the highest level since 2007, and the 30Y around 3.39%, a record high and more than 100bps higher than a year ago.”

Potential volatility could arise from bonds affecting the transmission of the yen — a problem already seen in 2024, when crypto markets reacted in real time to the phenomenon.

Japan’s central bank has signaled that it may deviate from the global trend and raise interest rates next.

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