Crypto markets are braced for the Federal Reserve's interest rate decision on Wednesday as dogecoin continues to tack on significant gains. 

Bitcoin was trading at $20,541 on Coinbase, down roughly 0.9% in the past 24 hours, according to exchange data. Meanwhile, ether lost 1.6% in the same period, trading at $1,594.

Altcoins were treading water on Tuesday. Binance's BNB lost 2.9% over the past 24 hours, while SOL and MATIC lost more than 3%, and DOT shed 2.3%. Memecoins were, as of yet, unaffected by the decline in prices. 

Dogecoin soared 17% in the past day to trade above $0.14. Shiba inu gained 4.7% in the same period, and dogelon mars was up over 10% at the time of writing, according to data via CoinGecko. The completion of Elon Musk's Twitter acquisition saw dogecoin tack on huge gains over the weekend, rising over 50% at one point on Saturday. 

Macro Matters

In the U.S., the Fed is set to make its next interest rate decision tomorrow, with the consensus among interest rate traders that a 75 basis point increase is coming. The probability of a hike that size is around 87%, according to the CME'S FedWatch tool. 

Volatility in bitcoin has increased moderately in the lead-up to tomorrow's decision. Annualized volatility — defined as the standard deviation of the past 30 days' daily percentage change in the price of bitcoin — is up above 32%, according to The Block's data dashboard, having hit July 2020 lows last week.

Elsewhere the bitcoin volatility index is up from 67.6 on Friday to 74.1 today. This index was launched by CryptoCompare and the University of Sussex Business School. The index measures the implied volatility of bitcoin — the view on volatility over the next 30 days held by bitcoin option traders. 

Economic indicators have mainly dictated crypto prices over the past few months. On Friday last week, U.S. PCE inflation caused prices to whipsaw, while inflation data and interest rate decisions have often foreshadowed heavy price moves.