Crypto Market Braces for Volatility as Goldman Sachs & JPMorgan Expect Fed Rate Hike This Week

The crypto market is bracing for huge volatility in Bitcoin (BTC), Ethereum (ETH), and XRP due to a macro-heavy week. Wall Street giants JPMorgan and Goldman Sachs now expect a Fed rate hike. Traders expect price action to remain choppy as multiple key events, including the CLARITY Act vote and the Bank of Japan rate decision, are also scheduled this week.

Escalating the Middle East conflict is increasing uncertainty in global markets and risking pressure on the crypto market. In addition, skyrocketing oil prices, Treasury yields, and the US dollar are contributing to heightened selling pressure on Bitcoin.

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JPMorgan and Goldman Sachs Estimate 25 Bps Fed Rate Hike in September

Goldman Sachs and JPMorgan have shifted to expecting a 25 bps Fed rate hike at the September meeting after hotter August inflation and the renewed oil surge. Markets are pricing roughly an 87% probability of a hike, Reuters reported on September 14.

Goldman Sachs abandoned its previous call for the Fed to hold rates steady and now projects a 25bps hike at the September 16 FOMC meeting. In contrast, JPMorgan is forecasting 25bps hikes in both September and December.

The shift follows hotter-than-expected August PPI and CPI inflation data. The continued US-Iran war is keeping oil prices elevated. At the time of writing, oil prices were 3% above $103 per barrel today.

Meanwhile, the US Fed rate decision is followed by the Bank of England and Bank of Japan’s interest rate decisions. Goldman Sachs expects potential selling pressure on Bitcoin, Ethereum and XRP, as higher rates generally mean tighter financial conditions and a stronger dollar.

CME FedWatch Tool now shows an almost 88% probability of a 25 bps rate hike this week, up from around 70% before the latest inflation prints. The narrative has moved from whether the Fed would hike rates at all to how large and persistent a new tightening cycle could become.

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Crypto Market Could Face Selling Pressure

Meanwhile, the CLARITY Act is set for a Senate procedural vote on Tuesday. Bernstein said crypto markets currently have a bearish bias, leaving room for a rebound amid positive CLARITY Act news.

President Trump agreed to ethics provision in new crypto bill text. Bernstein sees some Democrats supporting it to meet the 60-vote requirement. Bloomberg has reported that about 7 to 10 Democrats “sound like they want to ultimately pass a bill,” but public commitments remain limited.

Bernstein predicts upside momentum in crypto assets such as Bitcoin, Ethereum and XRP as Democratic support could lift sentiment in the crypto market. However, a failed vote, especially if paired with hawkish Fed commentary, could trigger another crash in the crypto market and crypto-linked stocks.

The derivatives market showed buying sentiment in the last few hours, as per CoinGlass data. At the time of writing, the total Bitcoin futures open interest jumped 2.78% to $52.80 in the past 24 hours. The 24-hour BTC futures OI is up more than 1.42% on CME and 2.22% on Binance.

Polymarket data shows prediction market participants expect the Bitcoin price to reach $85,000 by December 31, 2026, with 67% ‘Yes’ bets.