The US Federal Reserve’s key policymaking body, the Federal Open Market Committee (FOMC), announced in Wednesday’s meeting minutes that the federal funds rate will remain steady at a range of 3.5% to 3.75%. The central bank reaffirmed its long-term targets of maximum employment and 2% inflation. The statement also highlighted ongoing uncertainty in the markets driven by developments in the Middle East, adding that the Fed would maintain a flexible approach to risk management moving forward.
Fed aligns with market expectations
The decision to hold rates steady largely matched what market participants had anticipated. However, despite the expected outcome, Bitcoin continued to experience volatility in the aftermath. During Fed Chair Jerome Powell’s press conference, Bitcoin’s price remained fragile. Shubh Varma, CEO of Hyblock, described the market response as a typical “sell the news” scenario. Even so, Bitcoin’s quick rebound to pre-decision levels suggested that investor confidence has not dissipated.
After the release of the FOMC minutes, Bitcoin momentarily dropped to an intraday low of $74,937. This move brought the price below its 20-day moving average, a threshold that some traders view as a critical shift from support to resistance. The failure to achieve daily closes above this trend line may signal a loss of bullish momentum for Bitcoin.
Volatility persists, resistance remains tough
In recent weeks, Bitcoin has seen significant volatility in both spot and futures markets. According to Cointelegraph, after BTC broke through channel resistance, analysts expected it to hold between $76,500 and $75,500 to establish firmer support.
Analysts at Glassnode observed that Bitcoin investors increased their short positions ahead of the FOMC meeting. They detected a rise in open interest following Tuesday’s surge to $79,000. Noticeable divergence in trading volumes between spot and futures markets was also observed. Meanwhile, funding rates remained neutral.
Glassnode’s report notes that Bitcoin has found support between $65,000 and $70,000, but weak demand has made it difficult to establish a sustained upward trend. The profit-taking of short-term holders and a rise in net short positions in the futures market have further weakened bullish momentum.
Long-term accumulation grows despite global uncertainty
Analysts indicate that BTC prices are seeing meaningful accumulation in the $65,000 to $70,000 range, driven by increased institutional inflows into spot ETFs and rising open interest on the Chicago Mercantile Exchange (CME). While short-term momentum has slowed, longer-term investor interest appears strong.
In the crypto markets, the Fed’s interest rate policy is just one factor as geopolitical risks and shifting investor sentiment also play significant roles. Recent heightened volatility and pressure on short-term moving averages point to the likelihood of continued choppiness for Bitcoin in the near term.
