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Bitcoin FOMC Showdown Eyes $98K as Market Jitters Rise

Bitcoin FOMC Showdown Eyes $98K as Market Jitters Rise
Bitcoin FOMC Showdown Eyes $98K as Market Jitters Rise

Key Points

  • Bitcoin FOMC Showdown Eyes $98K as Market Jitters Rise
  • Bitcoin consolidates near $94,000 amid FOMC anticipation
  • ย Traders expect high volatility despite probable rate hold
  • Powellโ€™s tone could trigger major BTC price swings
  • ย Key price levels may signal breakout or breakdown

Bitcoin is holding steady around the $94,000 mark as the crypto market anxiously awaits the Federal Reserveโ€™s (FOMC) decision on interest rates this Wednesday. According to the CME FedWatch Tool, thereโ€™s a 95.6% chance the Fed will keep rates unchanged at 4.25% to 4.5%.

Interest rate probabilities. Source: CME FedWatch Tool - Techtoken

Interest rate probabilities. Source: CME FedWatch Tool – Techtoken

While a rate hold seems almost certain, volatility is expected to surge. Traders are on edge, watching Bitcoinโ€™s tight consolidation and bracing for potential fireworks depending on Fed Chair Jerome Powellโ€™s tone and future guidance.

Swissblock analysts have called this moment a โ€œbattle of resistance.โ€ Bears are increasing short positions, as shown by negative funding rates and high open interest. ETF inflows are also slowing, and liquidations are risingโ€”clear signs of a cautious, risk-off approach by investors.

โ€œThe $97,000โ€“$98,500 range is critical,โ€ Swissblock noted. โ€œIf bullish momentum builds, we could see short liquidations driving BTC upward. But thereโ€™s also a risk of a bull trap if conviction weakens.โ€

Historical trends add to the tension. In three of the last five FOMC meetings, Bitcoin reacted bullishly. However, todayโ€™s economic climateโ€”including soft GDP numbers, inflation fears, and ongoing US-China trade tensionsโ€”makes this meeting especially unpredictable.

Bitcoin Price Analysis. Source: TradingView - Techtoken

Bitcoin Price Analysis. Source: TradingView – Techtoken

Powellโ€™s tone could spark a breakoutโ€”or a market flush

Traders are acutely aware that Powellโ€™s words can make or break Bitcoinโ€™s short-term future. December 2023โ€™s hawkish pivot caused a massive sell-off across risk assets. A repeat performance could send Bitcoin tumbling toward recent lows.

โ€œBull markets donโ€™t die of old ageโ€”theyโ€™re murdered by the Fed,โ€ warned a veteran trader named Jim. โ€œIf Powellโ€™s tone is overly hawkish or dismisses weak GDP data, we might see another sharp market decline.โ€

Not all are bearish. Michaรซl van de Poppe, a popular crypto analyst, pointed out goldโ€™s recent rally as evidence of investor caution and suggested a possible ETH recovery post-FOMC. Readers following Ethereumโ€™s development should also note the upcoming Ethereum Pectra upgrade, which could influence ETH price action once market volatility settles.

Another analyst, Crypto Seth, noted increased โ€œdegenโ€ trading activity, with Bitcoin forming a local bottom near $94,000.

โ€œDegens are building positions expecting a move,โ€ Seth said. โ€œMarket makers might briefly push the price down to grab longs before an upward move. Expect choppy action before the FOMC.โ€.

Arthur Hayes, BitMEX co-founder, offered a bullish scenario. If the Fed hints at a future return to quantitative easing (QE), Bitcoin could rally explosively. But if Powell doubles down on a hawkish stance, the crypto market may face another sharp correction.

As of this writing, Bitcoin trades at $94,474, down 0.16% in the last 24 hours, according to BeInCrypto data.

Broader crypto market braces for aftershocks

The FOMC decisionโ€™s ripple effects are expected to impact not just Bitcoin but also altcoins and DeFi sectors. XRP traders, for example, continue to monitor the XRP price suppression narrative that has weighed on performance despite market rebounds.

Meanwhile, Ethereumโ€™s simplification efforts aim to make the network more accessible, which could attract new liquidity once the macro uncertainty clears.

Bitcoin (BTC) Price Performance. Source: Techtoken

Bitcoin (BTC) Price Performance. Source: Techtoken

Investors should also keep an eye on institutional movements. Justin Sunโ€™s recent involvement with First Digital Trust highlights growing strategic partnerships between crypto leaders and traditional finance. These collaborations may offer market stability once the Fedโ€™s policy direction becomes clearer.

Additionally, users must remain vigilant against increasing scams. A recent surge in crypto phishing scams shows that hackers often exploit periods of high market anxiety to target traders.

With the FOMC meeting just hours away, the crypto market holds its breath. Powellโ€™s guidance could tip the balance between a bullish breakout and a bearish breakdown.

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Abhijeet
Abhijeet is a Web3 and crypto writer who brings blockchain concepts to life with simple, engaging, and SEO-driven content. From DeFi and NFTs to emerging blockchain trends, he crafts stories that resonate with readers and build authority for Web3 brands.

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