Bitcoin was trading primarily around $74,000 on Wednesday as investors awaited the U.S. Federal Reserve’s policy decision. However, as of this writing, Bitcoin has just lost support at $73,500, with a path to $72,000 in sight.
The meeting is expected to keep the federal funds target range at 3.50% to 3.75%, while updating forecasts for inflation, growth and unemployment, as energy prices have risen due to conflict in the Middle East.
Policy interest rates themselves have received less attention than the Fed’s quarterly outlook or Powell’s press conference. Andre Dragosch, Head of Research at Bitwise Europe:
“Today’s markets are pricing in no changes from the Fed. Today’s focus is likely to be on forward guidance/SEP and comments on geopolitical risks and energy.”
Notably, even as President Donald Trump presses Powell to immediately cut borrowing costs, investors are moving in the other direction as oil prices soar and the outlook for inflation worsens.
According to Reuters, futures markets are currently pointing to one quarter-point rate cut in September this year and another in late 2027, but the path is much tougher than the White House claims.
For crypto traders, Wednesday’s meeting therefore became a test to see if Bitcoin can extend its recovery into the mid-$70,000 range, or if a more robust message from the Fed will lock the market near the next major option or psychological threshold of $80,000.
This setting is becoming more sensitive as labor indicators weaken and a leadership change looms in Washington, while central banks grapple with a new energy shock.
Oil shock completely changes interest rate outlook
The Fed came into this meeting with the economy already losing momentum before the dispute added a new path to inflation.
U.S. gasoline prices averaged $3.79 a gallon as of Tuesday, more than 25% above pre-war prices.
As a result, economists such as KPMG’s Diane Swonk expect policymakers to revise their inflation and unemployment forecasts upward and lower their growth outlook, reflecting a shift in policy context from a relatively orderly easing debate to a broader debate over how much inflation risk the Fed can absorb.
Recent U.S. data confirms that tension. The Commerce Department reported that core PCE inflation in January was 3.1% year-on-year, the highest level since March 2024, but the fourth-quarter GDP growth rate was revised downward to 0.7%.
The labor situation has also weakened, with non-agricultural employment falling by 92,000 in February and the unemployment rate rising to 4.4%.
These numbers will force the Fed to balance a weakened job market with a trend toward inflation that remains above target before higher energy costs are fully passed through.
This combination is at the heart of Bitcoin’s current macro story. Throughout most of the past two years, flagship digital assets have often been traded as proxies for easing financial conditions, lower real yields, and greater liquidity.
Wednesday’s meeting included a variety of inputs. If the Fed raises its inflation expectations, maintains a limited median path, and is wary of cutting rates, risk appetite is unlikely to widen quickly, even if digital assets have fared better than some equity benchmarks during recent geopolitical shocks.
Powell’s term adds a second clock to markets
The second timeline also works. According to the Fed, Powell’s current term as chairman ends on May 15, 2026, but his term as a board member runs through January 31, 2028.
The distinction has become important for investors looking to chart policy beyond Wednesday’s decision. A once-easy chair change has become less certain as President Trump’s nominee, former Fed director Kevin Warsh, remains in the Senate.
Warsh’s nomination remains on hold as the legal battle over the Justice Department’s investigation into Powell continues. Therefore, unless Mr. Warsh is confirmed by the June 16-17 FOMC meeting, Mr. Powell will continue to lead rate-setting meetings even after his term as chairman ends.
This possibility could widen the period in which markets will still trade on Powell’s policy framework, even as Trump continues to signal a preference for lower interest rates and a different leadership style at the Fed.
In the case of Bitcoin, this adds a second layer of interpretation to the Fed meeting. Investors will be reading Wednesday’s forecast looking for clues about 2026, and also considering how much the medium-term path is likely to change once the leadership issue is resolved.
It does not guarantee a cleaner policy path for cryptocurrencies or broader risk assets. Delays in the transition, friction in the Senate and continued legal disputes over Mr. Powell have added uncertainty to the timeline that investors had expected to guide the second half of the year.
Bitcoin rally faces policy test
Bitcoin has rebounded from a sharp drop below $60,000 earlier this quarter, but the market is still trading well below record levels late last year.
Citigroup lowered its 12-month Bitcoin target from $143,000 to $112,000, citing stalled progress on U.S. crypto legislation and narrowing room for regulatory advances that could support demand for ETFs and widespread institutional adoption.
In the same note, Citi said $70,000 is an important level for BTC as the market awaits policy and legislative direction.
However, industry experts believe that BTC can aim even higher given the current accumulation of companies that remain as part of the support structure. Cryptocurrency market maker Wintermute said:
“This setup is more constructive than it has been in recent months. Coinbase premium reset, ETF inflows, and institutional desk flows are all pointing in the same direction. Mid-$60s appears to be attracting the real floor for institutional bids.”
For context, Bitcoin ETFs are currently on their strongest inflow streak since October of last year, adding a total of $1.1 billion in positive cash for seven straight days.
At the same time, Strategy (formerly MicroStrategy) continues to aggressively increase its BTC holdings. The company acquired over 40,000 BTC this month, increasing its holdings to 761,068 Bitcoins.
These purchases demonstrate that the market’s largest corporate buyers are still adding exposure at prices close to where Bitcoin is currently trading, even though rate uncertainty remains unresolved.
This steady demand has helped build a buyer base beyond short-term macro traders and currency-driven momentum accounts.
Considering this, the next technical and derivatives reference point will be around $80,000. CME Group said in a March 6 market note that the $80,000 call strike has high open interest and is a level of interest for market participants.
This shows where traders have concentrated their exposure as Bitcoin seeks to stabilize after a significant drawdown in the first quarter. A move toward that level after the Fed’s decision is likely to garner more attention from options desks and short-term hedgers, especially if Powell leaves the door open for easing later this year.
(Tag translation) Bitcoin
