Bitcoin at range low ahead of FOMC: hawkish tone is the risk

Ahead of today’s FOMC decision, Bitcoin is at the bottom of its range, around $75.637. A rate hike is considered almost certain, but the question is how Fed Chair Kevin Warsh shapes the press conference afterwards. That makes the difference between a recovery or further downward pressure on risk assets, including Bitcoin.

Bitcoin is available at Bitvavo and OKX.

In brief

• Bitcoin is around $75.600 and is at the lower end of its recent trading range.
• A Fed rate hike is around 90% priced in by the market.
• Warsh’s tone during the press conference will determine the extent to which risk assets can recover.

Rate hike already priced in, but Warsh keeps the market on edge

As previously expected, Bitcoin faces a decisive FOMC day today. The market is pricing in a rate hike at around 90%, meaning the hike itself can hardly come as a surprise. What determines the direction is what Fed Chair Warsh says afterwards during the press conference.

According to DaanCrypto’s team, the crucial question is whether Warsh takes a hard line against inflation and leaves the door open to further hikes. That scenario would be bad news for risk assets such as Bitcoin.

Two scenarios for Bitcoin after the decision

If the so-called dot plot, the Fed officials’ interest rate expectations, changes little and the current hike is presented as a one-off step, DaanCrypto expects a positive reaction in risk assets, including Bitcoin.

The chart shows that Bitcoin is currently at the range low, a zone between around $75.300 and $76.500 that has acted as support several times in recent weeks. The range high is around $81.200. The price was 1.5% lower over the past 24 hours.

The Ethereum price’s move towards the FOMC decision was already volatile as well. Today’s outcome therefore affects the broader crypto market.