Will Jerome Powell’s FOMC Speech Trigger Bitcoin’s Next Move?

Bitcoin (BTC) and the broader crypto market await Wednesday’s FOMC (Federal Open Market Committee) meeting and the subsequent Jerome Powell press conference.

The US Federal Reserve (Fed) will announce its latest interest rate decision on Wednesday.

Crypto Market on Edge as Bitcoin Awaits FOMC Verdict

According to data on the CME FedWatch Tool, market participants assign a 95.6% probability that the Fed will hold rates steady at 4.25% – 4.5%. With this, attention is now squarely focused on Fed Chair Jerome Powell’s tone and guidance at the Wednesday conference.

“…if the 3.5% [now 4.4%] ends up playing out, the markets will have an insane positive reaction,” wrote Bitcoinsensus.

Despite the high likelihood of the Fed keeping interest rates steady, volatility remains a near certainty. Traders have adopted a risk-off stance, with Bitcoin price consolidating in the $94,000 range.

Similarly, ETF (exchange-traded fund) inflows are slowing, alongside rising liquidations. Swissblock analysts describe the atmosphere as a “battle” of resistance. They cite negative funding rates and high open interest, suggesting bears are intensifying short positions.

“The $97,000–$98,500 range is key. Momentum could trigger short liquidations, pushing BTC up. But beware: a bear trap might flip into a bull trap if conviction fades,” Swissblock warned.

This week’s FOMC meeting marks a pivotal moment for risk assets. Historical data shows that three of the last five FOMC decisions led to bullish outcomes for Bitcoin. However, this one comes amid heightened uncertainty.

The market is still digesting softer GDP prints, ongoing trade war tensions, and inflation worries, particularly in light of Trump’s tariff rhetoric, which has clouded rate-cut expectations for June.

“This Wednesday’s May FOMC meeting will result in an interest rate hold but also June expectations have flipped to a hold,” Veteran trader Mathew Dixon noted.

Powell’s Words May Trigger Bitcoin Breakout—or Breakdown

Such ambiguity is feeding the market’s anxiety. In December 2023, Powell’s hawkish pivot sparked a “bloodbath” across risk markets, and some traders now fear a repeat.

“Bull markets don’t die of old age—they’re murdered by the Fed. If Powell’s tone echoes December’s bloodbath or ignores negative GDP, markets may repeat the same violent flush… It’s a drunken game of darts for Wall Street analysts,” said trader Jim.

Meanwhile, analysts like Michaël van de Poppe see gold’s recent rally as a sign of prevailing caution.

“We’re still seeing the risk-off mentality going into the Fed meeting…Bitcoin build-up is good…expecting to see ETH turn upwards after Wednesday,” he said.

Another analyst, Crypto Seth, observed growing degen activity as the Bitcoin price forms a local bottom around $94,000.

“Degens are building up positions anticipating a move. Market makers might just wick down and grab the longs before up… Bitcoin might be choppy before the FOMC,” he stated.

The broader macro backdrop is equally murky. Analysts point to the unresolved US-China trade tensions and their impact on consumption, labor markets, and ultimately, political outcomes.

“Uncertainty is now a liability for Trump, not a negotiation tool,” they argued.

Despite the swirling fears, a breakout remains on the table. Bulls could get the green light if Jerome Powell strikes a more dovish tone or hints at cuts later this year. According to BitMEX co-founder and former CEO, Arthur Hayes, the Fed switching to quantitative easing (QE) could see Bitcoin price go parabolic.

However, Bitcoin could revisit recent lows in a sharp unwind if the Fed doubles down on hawkishness. Ahead of the Wednesday FOMC meeting, the market is walking a tightrope, and all eyes are on Powell to decide which way it tips.

BeInCrypto data shows Bitcoin was trading for $94,474 as of this writing, down by 0.16% in the last 24 hours.