Bitcoin (BTC) traders braced for classic volatility on July 26 as the United States Federal Reserve interest rate decision dawned.BTC/USD 1-hour chart. Source: TradingView“Let the games begin” for Bitcoin — FOMC day arrivesData from Cointelegraph Markets Pro and TradingView showed BTC price action hovering near $29,200.While barely moving since the start of the week, Bitcoin volatility was fully on market participants’ radar, with macro triggers just hours away.As the first of these, the Fed rates announcement was tipped to spark erratic — if unreliable — short-term BTC price moves, in line with tradition.Both the announcement itself and subsequent commentary from Fed Chair Jerome Powell were of interest on the day.“The market has priced in a 25bps rate hike, and currently also believes this will be the last rate hike in a while,” popular trader Jelle told Twitter followers in part of his latest analysis. “This is what makes the event interesting; what JPow says after the initial rate hike announcement.”Jelle was referring to practically unanimous expectations that the Fed will hike by 25 basis points. According to CME Group’s FedWatch Tool, those odds stood at 98.9% at the time of writing, with just a 1.1% chance of a 50-basis-point rise.Fed target rate probabilities chart. Source: CME GroupAnalyzing order book composition on the largest global crypto exchange Binance, on-chain monitoring resource Material Indicators noted that one or more entities were preparing for BTC’s price to react to the Fed with fresh losses.$16 million worth of “plunge protection” bid liquidity sat at just below $28,000 on the day.“Let the games begin,” it summarized in part of Twitter commentary.BTC/USD order book data for Binance. Source: Material Indicators/TwitterDollar nerves returnBeyond Bitcoin, U.S. dollar strength looked similarly undecided on trajectory ahead of the Fed.Related: Biggest mining difficulty drop of 2023? 5 things to know in Bitcoin this weekThe U.S. Dollar Index (DXY), currently in the midst of a modest rebound after hitting its lowest in over a year, trended downhill once more on the day, nearing 101.U.S. Dollar Index (DXY) 1-day chart. Source: TradingViewTraditionally inversely correlated with risk assets and Bitcoin, DXY remains a topic of interest for some BTC traders eyeing historical trends.Among them is popular trader Moustache, who this week revealed a copycat Bitcoin/DXY scenario echoing previous Bitcoin bull runs.A Bitcoin breakout, he argued, was only a matter of time.#Bitcoin As suspected last week, the $DXY is doing a retest. The real fun begins as soon as it’s done with it.It’s the same picture as in 2017 and 2020. -In 2017 it took 5 months from here to the peak -In 2020 it took 10 months -2023..Be patient ladies & gentleman. pic.twitter.com/qYsjvhBkHK— ⓗ (@el_crypto_prof) July 24, 2023
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