Bitcoin Dominance Rises as FOMC Meeting Approaches, Analysts Expect Volatility to Increase
Bitcoin’s dominance in the crypto market has reached a four-year high, with analysts predicting a potential surge in volatility as the Federal Open Market Committee (FOMC) meeting draws closer.
Bitcoin has been holding steady in the $94,000-$95,000 range, showing a slight 0.4% increase in the past 24 hours. This price stability comes amid growing anticipation for the FOMC meeting on May 7, which has led to Bitcoin’s dominance climbing to over 65%—the highest level since January 2021.
Meanwhile, altcoins have underperformed. The CoinDesk 20 Index dropped 0.7%, driven by declines in coins such as Ethereum (ETH), Aptos (APT), and Sui (SUI). As capital shifts into Bitcoin, many investors view the asset as a safer bet in light of ongoing global economic uncertainty.
Traditional markets, including the S&P 500 and Nasdaq, also closed down by about 0.7%, reinforcing Bitcoin’s growing appeal as a store of value. Joel Kruger, market strategist at LMAX Group, noted that the calm in the crypto market is likely temporary, with the potential for increased volatility after the FOMC announcement.
“Bitcoin’s relative stability could be a sign that the market is waiting for a trigger,” said Kruger. “Once the Fed signals its next steps, it could spark a larger move in both traditional and crypto markets.”
Anticipating a Surge in Bitcoin Volatility
With Bitcoin’s price movement recently subdued, Vetle Lunde, Head of Research at K33, predicted that a surge in volatility is imminent. He pointed to Bitcoin’s current low volatility, with the 7-day volatility nearing its lowest level in over a year. Lunde explained that Bitcoin often experiences sharp price moves after extended periods of quiet.
“Periods of low volatility in Bitcoin tend to precede major market shifts,” Lunde said. “As we approach significant events like the FOMC meeting, we can expect volatility to pick up.”
While Lunde does not foresee a drastic decline in Bitcoin’s price, he emphasized that such calm before the storm offers opportunities for long-term investors to increase their exposure to Bitcoin in anticipation of future gains.
