Bitcoin Faces Pivotal Moment as Markets Await Fed Decision
NAIROBI (CoinChapter.com) — Bitcoin (BTC) faces a pivotal moment as markets await the Federal Reserve’s next interest rate decision. Traders remain cautious, with BTC hovering around $84,000, while analysts debate whether a dovish stance from Fed Chair Jerome Powell could ignite a rally toward $90,000.
Bitcoin Price Holds $84K Amid Fed Uncertainty
Bitcoin’s price reached $84,358 on March 19, testing key resistance ahead of the Federal Open Market Committee (FOMC) meeting. Market sentiment hinges on the Fed’s forward guidance, with the central bank expected to maintain rates until at least June, according to CME Group’s FedWatch Tool.
Powell’s statements will likely determine the next move for risk assets, including Bitcoin. QCP Capital noted that while the Fed is widely expected to keep rates unchanged, investors will scrutinize Powell’s tone for any dovish shift.
“Tonight’s FOMC meeting is highly likely to hold rates steady. However, we will be watching closely for any dovish shifts, particularly on growth and inflation expectations,” QCP Capital wrote in a Telegram update. Meanwhile, U.S. equities continue to struggle, with the S&P 500 and Nasdaq Composite Index down 4% and 8.7% year-to-date, respectively. Bitcoin, despite maintaining a 10% gain in 2024, remains vulnerable to macroeconomic headwinds.
FOMC Decision Could Trigger Bitcoin Volatility
Traders expect heightened volatility around the FOMC decision, particularly if Powell signals a shift in monetary policy. A dovish tone could propel Bitcoin above its 200-day moving average at $84,995 and 21-day moving average at $84,350, according to Material Indicators co-founder Keith Alan.
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“A dovish tone that reduces recessionary fears could send Bitcoin price above the 200-Day and 21-Day MAs, and avert what seemed like an imminent death cross,” Alan wrote on X. However, a hawkish stance could reinforce market fears of prolonged tight financial conditions, potentially pushing Bitcoin below $80,000. K33 Research emphasized that while no immediate rate changes are expected, the market is increasingly pricing in cuts for later FOMC meetings.
US stocks retail flows data. Source:The Kobeissi Letter/X Market-implied probabilities suggest a 22% chance of a 25-basis-point cut in May, rising to 56.3% by June, according to K33 Research. These shifting expectations could create near-term price turbulence for Bitcoin.
Will BTC Rally Toward $90K?
Despite short-term uncertainty, some analysts remain optimistic about Bitcoin’s prospects. Markus Thielen, CEO of 10x Research, believes easing inflation concerns could pave the way for a counter-trend rally.
“Prices are oversold, so a counter-trend rally is possible, especially if the Fed leans slightly dovish,” Thielen said. However, he cautioned that this is not a major bullish development but rather “some fine-tuning from policymakers.” According to Thielen, Bitcoin could remain in a consolidation range but may test $90,000 in the near term. The Kobeissi Letter highlighted a surge in retail net inflows into Nasdaq 100 stocks, reaching the highest level in a year. JPMorgan’s retail investor sentiment score also hit a record 4 points, surpassing the 2021 meme stock peak.
Merlijn The Trader echoed bullish sentiments, pointing to Bitcoin’s oversold Relative Strength Index (RSI) as a key reversal signal.
“The RSI is screaming OVERSOLD & Bitcoin just hit a major bottom signal! Every time this setup appeared, $BTC RALLIED HARD!” Merlijn wrote on X.
Institutional Demand and Market Liquidity
Bitcoin spot ETFs recorded a second straight day of net inflows, with $209.1 million entering the market on March 19, following a $156.5 million inflow the previous day, according to Coinglass.
Despite this, CryptoQuant CEO Ki Young Ju warns that Bitcoin’s bull cycle may be over, expecting 6–12 months of sideways or bearish price action. He pointed to declining on-chain liquidity and new whale selling pressure as bearish signals.
Rekt Capital noted that Bitcoin’s sell volume has decreased, presenting an opportunity for buyers to step in. “It’s become more of a buyer-dominated market lately, but buyers need to showcase above-average volume for there to be more conviction in this move,” Rekt Capital wrote on X. Bitcoin’s near-term fate depends on the FOMC meeting and Powell’s tone. A dovish Fed could send BTC toward $90,000, while a hawkish stance may reinforce risk-off sentiment and drag Bitcoin lower.