Bitcoin entered the March Federal Open Market Committee (FOMC) meeting with strong momentum, trading above $74,000 after eight consecutive sessions of gains. However, data compiled by Bitcoin lender Two Prime suggests that this strength may be masking a recurring pattern, with FOMC meetings historically serving as short-term bearish catalysts for BTC.
Looking ahead to 2025, Bitcoin posted negative returns in the 48 hours following seven of the eight FOMC meetings. Even in May, when BTC surged higher, regardless of whether the Fed kept rates on hold or changed policy direction, the overall trend pointed to continued post-meeting weakness. This reinforces the idea that the events themselves, rather than the outcomes, drive the volatility.
The upcoming decisions are unlikely to come with surprises. The market expects the Fed to stabilize interest rates in a range of 350 to 375 basis points, which is almost certain (about 99%). Meanwhile, futures markets are pricing in only one 25 basis point rate cut before the end of the year, reinforcing the move higher in a longer-term context. Even new Fed Chairman Kevin Warsh is expected to take over in June.
Macro risks further complicate the situation. Escalating conflicts in the Middle East and oil prices hovering around $100 a barrel are likely to put upward pressure on the CPI inflation data, limiting the Fed’s flexibility to ease policy amid a weak job market.
As Bitcoin enters the session with an active status, the risk turns to the classic sell news reaction.
