Bitcoin Shows Low Volatility Ahead of Fed-Propelled Week, Calm Before the Storm?

Bitcoin (BTC) enters the new week with rare calmness, even as macro forces await that could shape the market's direction for the rest of August.

Despite the low trading volume characteristic of the weekend, this pioneering cryptocurrency has shown low volatility.

Bitcoin Holds Steady as Fed Minutes and Jackson Hole Conference Approach

At the time of writing, Bitcoin is trading at $117,600, maintaining consolidation through the weekend. Data from BiTBO also shows the volatility index has dropped to 1.02%, the lowest since October 2023.

Bitcoin investor Mike Alfred points out the market's restraint among traders and investors, noting the absence of speculative excitement.

"It's great to see no excitement in Bitcoin this weekend. No futures contract gaps to close," he wrote on X.

This comment highlights a maturation cycle where small retail investor enthusiasm has cooled, and institutional capital increasingly shapes Bitcoin's price action. Analysts at Bitcoin Archive reinforce this theme, pointing to record-low volatility levels.

"Bitcoin volatility near all-time low. Institutional buyers are compressing Bitcoin's volatility to just double that of gold. Double volatility for 10x profit? I'll take it!" they posted.

However, the quiet weekend scenario may not last long, with several US economic indicators ready.

On Wednesday, policymakers will release the Federal Open Market Committee (FOMC) meeting minutes, following the latest CPI (Consumer Price Index) report revealing inflation increased at an annual rate of 2.7% in July.

This data will provide the record of the July meeting. It comes after the Fed held rates at 4.25–4.50% with a 9–2 vote. Notably, this is the first time two dissenting votes have pushed against cuts since 1993. Powell's subsequent press conference was quite ambiguous, leaving the market seeking clarity.

The minutes may reveal the actual level of committee division. A dovish tone could push stocks higher, lower yields, and weaken the dollar, all positive outcomes for Bitcoin.

A hawkish message, however, would pressure growth and reinforce caution entering the main event on Friday.

The week will conclude at the Jackson Hole Conference, where Fed Chair Jerome Powell will deliver the keynote speech on Friday at 10 AM ET.

His statements carry significant weight as previous Jackson Hole speeches have reset expectations about interest rates and growth. When this occurred, the spillover effect spread across stocks, bonds, and cryptocurrencies.

If Powell emphasizes slowing growth, it would signal a dovish tone. With rate cuts already priced in, yields might decrease as growth stocks boom, potentially benefiting Bitcoin in a renewed risk appetite environment.

However, if the Fed chair leans towards persistent inflation, such a hawkish tone could raise yields, outperform cyclical stocks, and potentially derail Bitcoin's upward trajectory.

Therefore, the market faces multiple factors that could guide the third quarter's sentiment. These include Fed minutes, Jackson Hole, and other US economic signals.