- 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 comments could push Bitcoin toward a breakout or a correction.
Bitcoin traded just below $94,000 as investors prepared for the Federal Open Market Committee (FOMC) meeting on Wednesday and the post-meeting press conference with Chair Jerome Powell.
Source: CoinMarketCap
The Federal Reserve is widely expected to hold its benchmark interest rate steady at 4.25%–4.50%, with the CME FedWatch Tool assigning a 95.6% chance of no change.
Despite that consensus, traders are bracing for volatility from Powell’s remarks about the economic outlook, inflation, and the path of rates — all of which could sway risk appetite across digital assets.
Market participants are especially focused on forward guidance, as recent economic data and renewed geopolitical tensions have clouded expectations for rate cuts later in the year.
Trading volumes decline, ETF inflows slow ahead of the Fed event
Bitcoin’s recent sideways action reflects a cautious market mood.
ETF inflows have cooled, and leverage appears reduced as traders await clarity.
Analysts at Swissblock describe the environment as a “resistance battle,” noting that high open interest and negative funding rates point to intensified bearish positioning.
They mark the $97,000–$98,500 range as a critical resistance zone.
A break above that zone could trigger short liquidations, while a failed rally might trap bulls if momentum fades.
Liquidation data supports this tension. As prices consolidate in a tight range, derivatives traders appear to be betting on volatile moves in either direction.
Risk appetite has cooled, but sizable positions remain open, suggesting market participants are positioned for either a breakout or a breakdown depending on Powell’s tone.
Powell’s guidance could set the market’s direction
Although no rate change is expected this week, traders are searching for clues about the Fed’s stance for June and beyond.
In prior meetings, Powell’s words have moved crypto markets sharply.
December 2023 saw a hawkish shift that prompted a broad sell-off in risk assets, and some fear a repeat if Powell signals further tightening or downplays recent economic softening.
Market sentiment has been dampened by weak GDP readings and renewed trade tensions with China.
Recent tariff rhetoric from President Donald Trump has raised concerns that an anticipated June rate cut may be delayed.
Veteran trader Mathew Dixon noted that expectations for a June cut have already shifted toward being put on hold, further weighing on sentiment.
A recent gold rally is also seen as a sign of risk-off positioning. Analysts say it suggests investors are hedging against potential surprises from the Fed announcement.
Bitcoin’s price action depends on macro signals
Bitcoin is now consolidating near local support as traders weigh macroeconomic uncertainty.
“Degens,” or high-risk crypto traders, are reported to be building long positions in anticipation of a directional move.
However, some analysts warn that market makers could push prices lower to trigger stop losses before a potential rally.
Swissblock’s analysis supports this view, suggesting any breakout may be preceded by a final liquidity sweep.
Historical data offers mixed signals. Three of the last five FOMC announcements coincided with Bitcoin rallies, but this week’s event is clouded by more complex macro conditions.
Unresolved U.S.-China tensions, weak consumer demand, and political pressure around inflation are all weighing on market sentiment.
BitMEX co-founder Arthur Hayes has previously argued that a return to quantitative easing could spark a parabolic Bitcoin rally.
But absent dovish signals, Bitcoin could retest recent lows in a sharp pullback.
With no clear catalyst either way, the market remains balanced and awaits Powell’s next move.