Bitcoin is testing the $80,000 level amid the Fed meeting and a surge in oil prices. On Wednesday, Bitcoin mostly held around $74,000 while investors awaited the Fed's decision.
It is expected that the regulator will keep the rate in the range of 3.50% to 3.75%. At the same time, forecasts for inflation, economic growth, and the labor market will be updated. Pressure has intensified after the rise in energy prices amid the conflict in the Middle East. The rate itself is currently less of a concern for the market.
Much more important are the new forecasts from the Fed and Jerome Powell's speech. This was stated by the head of Bitwise Europe research, Andre Dragosh:
"The market is already pricing in no changes in rates. The main focus will be on Fed forecasts and comments on geopolitics and energy."
At the same time, Donald Trump continues to pressure the Fed and demands rate cuts. But the market is moving in the opposite direction. Rising oil prices have worsened inflation expectations.
According to Reuters, futures are currently pricing in only one rate cut this year, tentatively in September. The next is not expected until the end of 2027. This is a much tougher scenario than the one the White House is counting on.
For the crypto market, this is a key moment. The Fed's meeting will effectively decide whether Bitcoin can continue its recovery in the $70,000 zone or will again come under pressure. The next important target remains around $80,000.
The situation is becoming more complicated. The Fed is simultaneously facing rising energy prices, a weakening labor market, and political uncertainty in Washington. All of this makes the market's reaction less predictable.
The oil shock is changing rate expectations.
The Fed approached this meeting already with a slowing economy. And the conflict in the Middle East has added inflationary pressure through rising energy prices.
The average gasoline price in the U.S. reached $3.79 per gallon by Tuesday. This is more than 25% higher than levels before the conflict.
Against this background, economists are revising their forecasts. For example, Diana Swonk from KPMG believes that the Fed will have to raise its inflation and unemployment expectations. Conversely, the growth forecast for the economy will be lowered. It's no longer about smooth easing of policy, but a tougher choice regarding how much inflation the regulator is willing to tolerate.
Fresh data only intensifies this pressure. Core PCE inflation in January was 3.1% year-over-year. This is the highest since March 2024. Meanwhile, GDP growth for the fourth quarter was revised down to 0.7%.
The labor market has also started to weaken. In February, the number of jobs decreased by 92,000. The unemployment rate rose to 4.4%. As a result, the Fed finds itself in a difficult situation.
On one hand, the economy is losing momentum. On the other hand, inflation remains above target and may be exacerbated by expensive energy. It is against this backdrop that Bitcoin is currently moving.
In the last couple of years, it has often reacted to expectations of soft policy, falling real rates, and increased liquidity.
But conditions are changing now. If the Fed raises its inflation forecast, maintains a tough stance, and indicates that they will not rush to lower rates, it may cool interest in risk assets.
Even despite the fact that the crypto market has held up better than some stock indices in recent weeks amid geopolitical tensions.
Powell's term adds another factor of uncertainty.
There is one more factor that the market is looking at.
The current term of Jerome Powell as head of the Fed ends on May 15, 2026. But as a member of the Board of Governors, he remains until January 31, 2028. And this is starting to play a role.
Previously, a change in the head of the Fed seemed like a clear story. Now, it is not so obvious. Trump's candidate, former Fed member Kevin Warsh, has still not been confirmed by the Senate.
His appointment is on hold. At the same time, there is a legal dispute surrounding Powell. As a result, the process is dragging on.
If Warsh is not confirmed before the FOMC meeting on June 16-17, Powell will continue to lead rate meetings even after his term as head ends. This is an important moment for the market.
Thus, the window in which the current Fed policy operates may stretch longer than expected. Even despite Trump openly advocating for lower rates and a different management approach. For Bitcoin, this adds yet another level of uncertainty.
Investors are looking not only at the current Fed decision but are also trying to understand what will happen in 2026. Much depends on who ultimately leads the regulator. Meanwhile, clarity is not increasing.
The delay in the appointment, pressure from politics, and ongoing disputes create additional uncertainty. The market was counting on a clearer scenario in the second half of the year, but so far it is not present.
Bitcoin's recovery is constrained by Fed policy.
Bitcoin has already bounced back part of its decline after dropping below $60,000 this quarter. However, it is still far from the levels of the end of last year.
Citigroup has revised its forecast. The new 12-month target is $112,000 instead of $143,000. The reason is that progress on crypto regulation in the U.S. has slowed. Plus, there are fewer factors that could support demand through ETFs and institutions.
The same report noted an important level. The $70,000 area remains key while the market awaits signals on policy and legislation.
But there is another point of view. Some market participants believe that growth potential still exists. Largely due to corporate purchases that continue to support the price.
Market maker Wintermute notes:
"The situation looks better than in recent months. The premium on Coinbase has normalized, inflows into ETFs are continuing, and institutional trades are also in the plus. A real demand has formed from large players around $60,000."
Bitcoin ETFs are currently showing strong inflows. For seven consecutive days, net investments have been recorded. The total volume amounted to about $1.1 billion.
At the same time, Strategy continues to actively buy Bitcoin. Just this month, the company added over 40,000 coins. The total volume has grown to 761,068 BTC. This is an important signal.
Large players continue to increase positions around current levels. Even despite the uncertainty regarding rates.
As a result, a base of buyers is being formed. Not only short-term traders but also more long-term market participants.
The next important zone is currently closer to $80,000. According to CME Group, it is at this level that high open interest in options is concentrated. This makes it a key point for the market.
If after the Fed's decision the price starts moving in this direction, attention to Bitcoin will sharply increase. Especially from options traders and those who hedge positions.
Much will depend on Powell's signals. If he indicates that easing policy is still possible this year, it may strengthen the upward movement.
#ФРХ #TRUMP #etf #Write2Earn #BinanceSquare
