Cryptocurrency gains paused on Tuesday ahead of Wednesday’s Federal Reserve decision.
Bitcoin After Briefly Topping $76,000 Overnight Prices fell back to around $74,000 during the US session, having edged higher over the past 24 hours.
Cryptocurrency stocks mostly posted modest gains, with stablecoin issuer Circle (CRCL) and bitcoin miner Bitdeer (BTDR) standout, rising 5% and 12% respectively. The Nasdaq closed up 0.5% and the S&P 500 rose 0.25%.
The Federal Reserve is almost universally expected to keep its benchmark interest rate unchanged at 3.50%-3.75% tomorrow. But given the rapid rise in oil prices and its likely impact on inflation due to the Iran war, focus turned to Jerome Powell’s message and policymakers’ outlook on future interest rates.
Bitfinex analysts said the key question is whether policymakers are still hinting at a rate cut in 2026 or are leaning towards not further easing monetary policy. A more hawkish outcome could lead to a stronger dollar, putting pressure on risk assets, they said.
Powell’s views on recent oil developments will also be in focus. Viewing this as a temporary shock would boost sentiment, while a more stagflationary view could limit the Fed’s flexibility.
A report on the producer price index for February will also be released on Wednesday. Generally speaking, the producer price index (PPI) is far less weighted than the consumer price index (CPI), but given that it precedes the Fed meeting, it will be watched more closely.
The Bitfinex team continued: “Federal Open Market Committee (FOMC) hawks followed by PPI data would be the most damaging combination for stocks and risk assets.”
Vetle Lunde, head of research at K33, said this backdrop was already reflected in market expectations for a higher long-term path for interest rates.
He said in a note on Tuesday that the likelihood of keeping rates on hold during the July meeting has jumped to over 60% from 22% last month, and that a potential rate cut could be further delayed until late 2026.
For now, price action is likely to remain calm. Bitfinex analysts concluded: “We expect the $74,000 to $76,000 area to temporarily cap prices.”
