Will the Fed and Oil Data Trigger Massive Bitcoin Volatility?

Bitcoin faces rising volatility as Federal Reserve rate decisions and U.S. oil data converge on January 28.

Bitcoin (BTC) is facing a test of its sensitivity to traditional finance as two major macro events converge on Wednesday, January 28, 2026.

The cryptocurrency’s near-term trajectory may be swayed by U.S. crude oil inventory data and the Federal Reserve’s interest rate decision, with both holding power to shift market-wide expectations on inflation and liquidity.

Markets Enter “Super Wednesday” With Risk Appetite on Pause

On-chain technician GugaOnChain described January 28 as a “super Wednesday” for global markets, pointing to U.S. crude oil inventories and the Federal Reserve meeting as parallel risk events.

“Both events have the potential to alter expectations of inflation, liquidity, and risk,” the analyst wrote. “In this scenario, Bitcoin emerges as an asset sensitive to the same variables, reacting both to energy shocks and to changes in monetary policy.”

According to them, West Texas Intermediate crude futures for March settled around $61 per barrel, down about 0.7% on the day, while open interest fell by more than 21,000 contracts. They noted that declining participation in oil markets suggests traders are reducing exposure before the key macro signals land.

GugaOnChain also highlighted a moderate negative correlation between Bitcoin and crude oil over the past week, with BTC up just over 5% in that period while oil was flat. According to the analyst, energy markets remain a reference point for inflation expectations, which in turn feed into liquidity conditions that affect Bitcoin and other risk assets.

They concluded with a direct assessment of the current setup:

“The numbers reveal a market in a waiting mode. Super Wednesday will be decisive to calibrate expectations and may redefine the correlation between energy and crypto.”

Bitcoin Price Action Reflects Broader Macro Caution

At the market, the price of the number one cryptocurrency gained about 0.6% in the last 24 hours, trading in a narrow range between $87,000 and $89,000. Zooming out, the asset is down about 3.6% over the past week and nearly 4% across two weeks, even as the broader crypto market has been flat.

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On a monthly view, BTC is marginally higher, but it remains about 12% lower year over year and almost 30% below its all-time high achieved in October last year when it went past $126,000.

This underperformance comes as institutional flows remain uneven. A recent CoinShares report showed $405 million leaving Bitcoin-linked investment products in a single week, reflecting reduced exposure as expectations for near-term Fed rate cuts faded.

At the time, analysts at QCP Capital said that BTC has struggled to hold gains even when supported by traditionally positive macro narratives, pointing to ongoing selling pressure during U.S. trading hours.

As traders await clarity on Fed guidance and inflation signals tied to energy prices, Bitcoin’s tight range suggests conviction is limited. However, both crypto and traditional markets seem to be focusing on absorbing the policy tone instead of chasing short-term moves.