- The FOMC is expected to keep rates at 4.25%–4.50%; the CME tool shows a 95.6% probability.
- Swissblock identifies $97K–$98.5K as a key resistance zone.
- Powell’s remarks could push Bitcoin toward either a breakout or a correction.
Bitcoin is trading just under $94,000 as investors prepare for Wednesday’s Federal Open Market Committee (FOMC) meeting and the post-meeting press conference by Jerome Powell.
Source: CoinMarketCap
The Federal Reserve is widely expected to hold its policy rate steady at 4.25%–4.50%, with the CME FedWatch Tool assigning a 95.6% probability to no change.
Despite that consensus, traders are bracing for volatility driven by Powell’s commentary on economic prospects, inflation and the likely path of interest rates — all factors that can affect risk sentiment in digital assets.
Market participants are especially focused on forward guidance, as recent economic releases and renewed geopolitical tensions have clouded expectations for rate cuts later in the year.
Trading volume falls, ETF inflows slow ahead of Fed event
Bitcoin’s recent sideways move reflects a cautious market mood.
ETF inflows have cooled and leverage appears to be declining as traders await clarity.
Swissblock analysts describe the environment as a “resistance battle,” noting that high open interest and negative funding rates point to increased bearish bets.
They flag the $97,000–$98,500 range as a critical resistance area.
A break above that zone could trigger short squeezes, while a failed rally risks trapping bullish traders if momentum fades.
Liquidation data also underscores this tension. As price trades in a narrow range, derivatives traders seem to be positioning for a volatile move in either direction.
Risk appetite has cooled, but meaningful positions remain open, suggesting participants are braced for either a breakout or a breakdown depending on Powell’s tone.
Powell’s guidance could determine market direction
Although no rate change is anticipated this week, traders will look for clues about the Fed’s stance for June and beyond.
In previous meetings, Powell’s words have sparked major moves in crypto markets.
December 2023 saw a sharp reversal that triggered broad risk-off selling, and some fear a repeat if Powell signals further tightening or downplays recent signs of economic slowdown.
Market sentiment has been dampened by weak GDP data and renewed trade tensions with China.
Recent rhetoric about tariffs has raised concerns that anticipated rate cuts in June could be delayed.
Veteran trader Mathew Dixon noted that expectations for a June cut have already narrowed, adding pressure to sentiment.
The recent rise in gold prices is also seen as a sign of risk-off positioning. Analysts say this suggests investors are hedging against potential shocks from the Fed announcement.
Bitcoin price action hinges on macro signals
Bitcoin is consolidating near local support as traders weigh macroeconomic uncertainty.
“Degens,” or high-risk crypto traders, are building long positions in anticipation of a price move.
However, some analysts warn that market makers might push prices lower to trigger stop losses before a potential rebound.
Swissblock’s analysis supports this view, suggesting any breakout could be preceded by a final liquidity sweep.
Historical data gives mixed signals. Three of the last five FOMC announcements coincided with Bitcoin rallies, but this week’s event is overshadowed by more complex macro conditions.
Unresolved tensions between the U.S. and China, softer consumer demand and political pressure around inflation weigh heavily on market sentiment.
BitMEX co-founder Arthur Hayes has previously argued that a return to quantitative easing could spark a parabolic Bitcoin rally.
In the absence of dovish signals, however, Bitcoin could retest recent lows in a sharp pullback.
Without a clear catalyst, the market remains finely balanced, waiting for Powell’s next move.