Ahead of the Federal Reserve (Fed) monetary policy meeting (FOMC) scheduled for late January, the volatility of major altcoins such as BNB, XRP, USDC, and TRON is compressing, increasing the possibility of increased price volatility.
Cryptocurrency market analysts predict that Bitcoin will remain within a limited range around $90,000 until the FOMC announcement on January 29th, and are focusing on the rotation of liquidity into altcoins with payment and settlement capabilities.
The prevailing view is that the Federal Reserve will likely keep its benchmark interest rate unchanged at its January meeting. Market analysts predict that, depending on the Fed's policy stance, a rate freeze could have a negative or limited impact on risky assets, including cryptocurrencies. Consequently, investors' wait-and-see attitude is likely to persist for the time being.
BNB, a core utility asset in the exchange ecosystem, is currently trading in the $860 range, showing price sensitivity linked to exchange usage and ecosystem activity rather than short-term speculative flows. XRP, used as a cross-border settlement asset, is fluctuating in the mid-to-high $1.80 range and trading near its technical support level.
Of note is the inflow of funds into the stablecoin USDC. This trend, observed ahead of the FOMC meeting, suggests that market participants are managing risk and adopting cautious positioning. TRON, a high-throughput network, is trading at around $0.25 and has shown a pattern of increasing stablecoin payments and remittance activity during periods of macroeconomic uncertainty.
Market experts suggest three scenarios based on the FOMC's outcome. A more dovish message than expected could open the door for Bitcoin and major altcoins to break above their trading range. A neutral or hawkish stance, they say, could lead to continued volatility within their trading range. Historically, Bitcoin's daily volatility has tended to increase significantly on FOMC announcement days, urging investors to exercise caution.
