The Federal Open Market Committee (FOMC) meetings are pivotal events for both traditional financial markets and cryptocurrency traders, as they often dictate short-term market sentiment and risk appetite. On June 18, 2025, prominent crypto analyst Michaël van de Poppe shared a cautious trading strategy for FOMC meetings via a tweet, emphasizing the volatility and deceptive price movements that typically follow the initial announcement and Federal Reserve Chairman Jerome Powell’s subsequent speech. His advice to avoid leverage and either skip trading or approach with extreme caution resonates with the unpredictable nature of these events. FOMC decisions on interest rates directly impact the U.S. dollar strength, stock indices like the S&P 500, and risk assets such as Bitcoin and altcoins. For instance, a dovish stance at 2:00 PM EST often triggers an initial rally in risk assets, as seen in past meetings like March 2023, where Bitcoin surged 3.5% within an hour of the announcement, only to retrace 2.1% by 3:30 PM EST after Powell’s hawkish remarks, according to historical data from CoinGecko. This fake-out move, as Michaël notes, is a common trap for inexperienced traders. Stock market reactions also play a critical role; when the S&P 500 spiked 1.2% post-announcement on that date, Bitcoin followed with a correlated 2.8% uptick by 2:15 PM EST, reflecting institutional money flow into risk-on assets. However, the subsequent pullback in equities often drags crypto down, creating a whipsaw effect that demands patience and precision from traders navigating these turbulent waters.

From a trading perspective, FOMC meetings present both high-risk and high-reward opportunities for crypto markets. Michaël’s strategy of avoiding leverage is sound, given the heightened volatility; for example, on March 22, 2023, Bitcoin’s 24-hour trading volume on Binance spiked by 47% to $12.3 billion between 2:00 PM and 11:59 PM EST, as reported by Binance market data, indicating massive liquidation risks for leveraged positions. The initial fake move often misleads traders, as seen when Ethereum jumped 2.9% to $1,820 at 2:10 PM EST on the same day, only to drop to $1,780 by 4:00 PM EST post-Powell speech. This underscores the importance of waiting for confirmation after the speech, typically around 2:30 PM EST, before entering positions. Cross-market analysis reveals a strong correlation between crypto and stock movements during FOMC events; when the Dow Jones Industrial Average fell 0.8% by 3:00 PM EST on March 22, 2023, Bitcoin mirrored this with a 1.5% decline to $27,800. This interplay suggests that traders should monitor equity indices as leading indicators. Additionally, institutional money flow often shifts between stocks and crypto post-FOMC, with risk-off sentiment pushing funds into stablecoins or cash equivalents, as evidenced by a 15% surge in USDT trading volume on Kraken at 3:15 PM EST on that date. For altcoins like Cardano (ADA), which dropped 3.2% to $0.35 by 5:00 PM EST, smaller market caps amplify volatility, creating potential scalping opportunities for disciplined traders.

Technical indicators and on-chain metrics further illuminate the FOMC impact on crypto markets. On March 22, 2023, Bitcoin’s Relative Strength Index (RSI) on the 1-hour chart spiked to 68 at 2:05 PM EST, signaling overbought conditions post-announcement, before crashing to 42 by 4:00 PM EST, as per TradingView data. This rapid shift aligns with Michaël’s warning of fake moves. Trading volume for BTC/USDT on Binance peaked at $1.8 billion in the hour following the announcement (2:00-3:00 PM EST), a 55% increase from the prior hour, reflecting panic buying and selling. On-chain data from Glassnode showed a 12% uptick in Bitcoin wallet addresses holding over 1 BTC between 2:00 PM and 6:00 PM EST, hinting at accumulation by larger players during the dip. For Ethereum, gas fees surged 18% to an average of 25 Gwei by 3:30 PM EST, indicating network congestion from rapid transactions. Stock-crypto correlation was evident as the Nasdaq 100’s 1.1% gain by 2:20 PM EST mirrored a 2.3% rise in Solana (SOL) to $22.50 on Coinbase. Institutional impact was clear with crypto-related stocks like Coinbase (COIN) rising 2.7% to $65.20 by 3:00 PM EST on the same day, as reported by Yahoo Finance, suggesting capital rotation into crypto-adjacent equities during risk-on phases. Traders can exploit these correlations by setting tight stop-losses and targeting quick reversals, especially in pairs like BTC/USD and ETH/USD, while monitoring S&P 500 futures for directional cues. Patience post-Powell speech remains key to avoiding traps.

FAQ:
What is the best time to trade crypto during FOMC meetings?
The safest window to trade crypto during FOMC meetings is after Jerome Powell’s speech, typically around 2:30 PM EST, as the initial announcement at 2:00 PM EST often triggers fake moves. Historical data shows Bitcoin and altcoins like Ethereum stabilizing their direction post-speech, reducing the risk of whipsaw losses.

How do stock market movements during FOMC affect crypto?
Stock market movements, especially in indices like the S&P 500 and Nasdaq 100, have a direct correlation with crypto assets during FOMC events. For instance, on March 22, 2023, a 1.1% Nasdaq gain by 2:20 PM EST aligned with a 2.3% Solana rise, reflecting risk-on sentiment spilling into crypto markets.