FOMC expected to hold rates at 4.25%–4.50%, CME tool shows 95.6% odds.
Swissblock flags $97K–$98.5K as key resistance zone.
Powell’s comments could tilt Bitcoin towards breakout or correction.
Bitcoin is trading just below $94,000 as investors prepare for Wednesday’s Federal Open Market Committee (FOMC) meeting and Jerome Powell’s post-meeting press conference.
Source: CoinMarketCap
The Fed is widely expected to keep its benchmark interest rate steady at 4.25%–4.50%, with CME FedWatch Tool data showing a 95.6% probability of a rate hold.
Despite this consensus, traders are bracing for volatility triggered by Powell’s comments on the economic outlook, inflation, and rate trajectory, which could sway risk sentiment across digital assets.
Market participants are especially focused on forward guidance, as recent economic data and geopolitical tensions have clouded expectations for rate cuts later this year.
Trading volume dips, ETF inflows slow ahead of Fed event
Bitcoin’s recent sideways movement reflects a cautious market mood.
ETF inflows have cooled, and leverage appears to be winding down as traders await clarity.
Analysts at Swissblock describe the environment as a “battle of resistance” and note that high open interest and negative funding rates point to intensified bearish bets.
They flag the $97,000–$98,500 range as a critical resistance zone.
A break above could trigger short liquidations, but a failed rally might trap bullish traders if momentum fades.
Liquidation data also supports this tension. As price hovers within a tight range, derivatives traders appear to be betting on a volatile move in either direction.
Risk appetite has cooled, but significant positioning remains open, suggesting market participants are preparing for a breakout or breakdown, depending on Powell’s tone.
Powell’s guidance could determine market direction
While no change in rates is expected this week, traders are looking for hints on the Fed’s stance for June and beyond.
In previous meetings, Powell’s words have caused major swings in crypto markets.
December 2023 saw a hawkish turn that led to a broad sell-off in risk assets, and some fear that a repeat could materialise if Powell signals further tightening or ignores recent signs of economic slowdown.
Market sentiment has been dampened by soft GDP data and renewed trade tensions with China.
The impact of President Donald Trump’s recent tariff rhetoric has raised concerns that rate cuts previously expected in June may now be delayed.
Veteran trader Mathew Dixon noted that expectations for a June cut have already flipped to a hold, further pressuring sentiment.
Gold’s recent rally is also seen as a sign of risk-off positioning. According to analysts, this suggests investors are hedging against potential shocks from the Fed’s announcement.
Bitcoin price action hinges on macro signals
Bitcoin is currently consolidating near local support as traders weigh macroeconomic uncertainty.
Degens, or high-risk crypto traders, are reportedly building long positions, anticipating a price move.
However, some analysts warn that market makers may push prices lower to trigger stop losses before a potential upside.
Swissblock’s analysis supports this view, suggesting that any breakout could be preceded by a final liquidity sweep.
Historical data offers mixed signals. Three of the last five FOMC announcements have coincided with Bitcoin rallies, but this week’s event is clouded by more complex macro conditions.
The unresolved US-China tensions, weaker consumer demand, and political pressure around inflation all weigh heavily on market sentiment.
BitMEX co-founder Arthur Hayes has previously argued that a shift back to quantitative easing could ignite a parabolic Bitcoin rally.
But in the absence of dovish signals, Bitcoin could retest recent lows in a sharp pullback.
With no clear catalyst either way, the market remains delicately balanced, awaiting Powell’s next move.
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