Bitcoin Braces for FOMC (Federal Open Market Committee), Bitcoin (BTC) and the larger crypto market are on edge. Federal Reserve Chair Jerome Powell will then lead a press conference.While markets widely expect a rate hold, the real focus lies on Jerome Powell’s tone during the post-meeting press conference. Any hints of future rate cuts or hawkishness could send ripples across risk assets, including cryptocurrencies. Bitcoin has been trading sideways near the $94,000 level, reflecting uncertainty and reduced risk appetite. Volatility is likely regardless of the decision, with traders preparing for sharp moves in either direction.
Fed Set to Maintain Rates; Focus Turns to Powell’s Tone
Most people agree the US Federal Reserve should keep its benchmark interest rate between 4.25% and 4.5%. The CME FedWatch Tool projects a 95.6% likelihood the Fed will maintain rates the same. Consequently, investor attention is now turning to Powell’s forward guidance, which could greatly affect market mood.
Bitcoinsensus said, “markets could react with an explosive upward movement if the 3.5% [now 4.4%] scenario plays out.” Still, volatility is practically assured even with constant rates. As traders go risk-off,
Bitcoin Market is now stabilizing around $94,000.
As ETF Inflows Challenge Bitcoin Liquidations are mounting, a symptom of growing crypto market stress; slow ETF inflows have decreased. The present phase is described by Swissblock experts as a “battle” of resistance. They point to declining financing rates and rising open interest to imply that bearish attitude is getting stronger.
Swissblock added, “important is the $97,000–$98,500 zone. A momentum push could set off a short liquidation tsunami that would drive BTC higher. Still, vigilance is advised; what starts as a bear trap could readily turn into a bull trap should confidence wain.
Historical Patterns Against Present Unknown Uncertainty
The FOMC decision this week is a turning moment for Bitcoin and other risk assets. Three of the last five Fed meetings historically produced favorable results for Bitcoin. Given the dubious financial backdrop, the stakes are bigger this time around.
Markets are absorbing declining GDP figures, continuing US-China trade concerns, and steady inflation. Political rhetoric, especially former President Trump’s tariff threats, which have tarnished hopes for a rate decrease in June, complicates these elements even more.
Veteran trader Mathew Dixon pointed out, “this Wednesday’s May FOMC meeting will probably result in a rate hold, but the market has also priced out June rate cuts.”
Powell’s Words Might Set Off Breakout—or Breakdown
The market is still tense, with many worried about a replay of the hawkish shock that sparked off a dramatic drop in risk assets from December 2023. Trader Jim said, “The Fed kills bull markets; these are not natural deaths. Powell’s posture or downplays of dismal GDP numbers could cause another strong flush. For Wall Street, this is a drunken game of darts.
Some analysts are detecting positive signals somewhere among the ambiguity. Michaël van de Poppe notes the recent surge in gold as a warning indicator and adds, “We’re still in risk-off mode ahead of the Fed meeting. The accumulation of Bitcoin seems positive, and following Wednesday ETH should climb higher.
Given the line Bitcoin maintains
As BTC finds support close to $94,000, Crypto Market Seth pointed out rising speculative activity Degens are filling roles anticipating a relocation. Longs before a surge upward could be shaken by market makers. Expect chop before the FOMC, he advised.
More complication is added by the larger macroenvironment. Analysts caution that US-China tensions are compromising consumer confidence and labor markets, elements that could significantly affect political results as well as the state of the economy.
Bitcoin Outlook depends on Fed Guidance
A breakout is still possible despite general anxiety. Bulls might get the green light if Powell adopts a dovish tone or suggests more rate cuts. Arthur Hayes, a co-founder of BitMEX, even hypothesised that a return to quantitative easing (QE) may cause the price of Bitcoin to soar parabolicly.
If the Fed turns more hawkish, though, BTC might review recent lows in a quick sell-off. The market is balancing till then, hence Powell’s advice on Wednesday will be the deciding force in either direction.
