The market cap of popular cryptocurrency Solana SOL/USD and meme coin Shiba Inu SHIB/USD has slipped below that of Dogecoin DOGE/USD relative Litecoin LTC/USD.

What Happened: At the time of writing, LTC was at 13 in terms of market capitalization, while SHIB ranked 14th in the list and SOL was at 16, according to CoinMarketCap’s top 100 list of cryptocurrencies.

See Also: Best Cryptocurrency to hedge against inflation

SOL began the year trading at $178.89 and with a market capitalization of $55.09 billion. It was once considered an Ethereum ETH/USD killer. The crypto winter and the collapse of Sam Bankman-Fried‘s FTX FTT/USD sent shockwaves throughout the crypto market, which consequently drove down the value of SOL to $13.04, down 92.71% from its price in January 2022.

Today, SOL is trading at $13.04 with a market cap of $4.73 billion.

SHIB started the year trading at $0.0000473, with a market capitalization of $18.35 billion. The FTX contagion plunged SHIB to 0.000009024, down 80%.

Price Action: At the time of writing, LTC was trading at $78.78 up 27% in the past 24 hours, according to Benzinga Pro.
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Bitcoin and other cryptocurrencies in the market have had an interesting week-and-a-half. From the CPI report to the completion of the Ethereum Merge, it has been a rollercoaster of volatile activity across the market. Even with this, the market is still not done with its big events. The FOMC meeting is held on Wednesday, which, like in the past, promises unpredictable movements for the crypto markets.

Expect Volatility For Bitcoin

The FOMC meeting has always triggered volatility across not just the crypto markets but various financial markets. Bitcoin’s reaction to the FOMC meeting has also gotten more prominent with the increased correlation with the stock and macro markets. Given this, any FOMC meeting is expected to have a significant impact on the crypto market. 

This is no different from the FOMC meeting that is happening on Tuesday. Previously, the FOMC meeting hours have been very volatile in the space as the market awaits the results of the meeting. As such, it is expected that Wednesday will see a lot of volatility, especially during meeting hours. More specifically, volatility is expected to hit its peak between 17:00-21:00 UTC as had been observed during previous meetings.

Volatility expected during FOMC meeting | Source: Arcane Research

Naturally, bitcoin’s price will respond to the equity indexes during this time and will tend to move in tandem with it. So while investors keep an eye on the crypto market, it will be prudent to also keep an eye on the macro markets during this time as well.

High Swings In Crypto

The reaction of bitcoin and other cryptocurrencies can vary during this time but the wild swings are to be expected. This time around, the volatility is also expected to be very high because there is uncertainty across the markets regarding if there will be further rate hikes or not.

It actually gives an idea of the importance of the FOMC meeting to different financial markets and now the crypto market, as it becomes a larger contender. Presently, there are reports of an expected rate hike of 100bps. The market has reacted to this by pricing a 20% chance of such a hike.

BTC remains below $20,000 | Source: BTCUSD on TradingView.com

Interestingly, the volatility from the FOMC meeting does not seem to last beyond the end of the meeting. In some cases, it has lasted a few hours more, but by the next day, the volatility usually settles and normalizes.

So, in the end, the volatility from this meeting does not command much relevance over a longer period of time. It often acts as a clue for traders regarding how trades should be constructed during this time. If rate hikes continue though, bitcoin’s price may break below $18,000 for the second time this year.

Featured image from Yahoo Money, charts from Arcane Research and TradingView.com

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