Bitcoin traded mostly around $74,000 on Wednesday as investors waited for the Federal Reserve’s policy decision. However, at the time of writing, Bitcoin has just lost support at $73,500, with a route to $72,000 now in sight.
The meeting is expected to leave the federal funds target at 3.50% to 3.75%, while updating projections for inflation, growth and unemployment after conflict in the Middle East sent energy prices higher.
The policy rate itself has attracted less attention than the Fed’s quarterly forecasts and Chairman Jerome Powell’s press conference. Andre Dragosch, head of research at Bitwise Europe, said:
“The direction of the markets today will not be changed by the Fed. The focus today will most likely be on forward guidance / SEP = ‘dot plot’ and comments on geopolitical risks and energy.”
Notably, President Donald Trump has urged Powell to immediately cut borrowing costs, but investors have gone the other way as oil prices rose and the inflation outlook worsened.
According to Reuters, futures markets now imply a quarter-point rate cut this year, in September, and again at the end of 2027, a path much tighter than the White House has advocated.
For crypto traders, this turned Wednesday’s meeting into a test of whether Bitcoin can continue a recovery that has brought it back to the mid-$70,000s, or whether a firmer Fed message will keep the market below the next major options and psychological threshold near $80,000.
The setup has become more sensitive as the central bank faces a new energy shock, while at the same time labor indicators have weakened and a leadership transition approaches in Washington.
An oil shock changes the interest rate outlook
The Fed entered this meeting with the economy already losing momentum before the conflict added a new inflation channel.
U.S. gasoline prices averaged $3.79 per gallon on Tuesday, more than 25% above levels before the start of the war.
As a result, economists such as KPMG’s Diane Swonk to expect policymakers to adjust their inflation and unemployment forecasts and lower their growth prospects, reflecting a policy backdrop that has shifted from a relatively orderly easing debate to a broader dispute over how much inflation risk the Fed can absorb.
Recent US data support this tension. The Commerce Department reported annual core PCE inflation of 3.1% in January, the highest since March 2024, while fourth-quarter GDP growth was revised down to 0.7%.
The labor picture also deteriorated, with nonfarm payrolls falling by 92,000 in February and the unemployment rate rising to 4.4%.
These numbers have the Fed balancing a job market that has lost momentum against an inflation trend that remains above target before higher energy costs are fully passed on.
That mix is central to Bitcoin’s current macro story. For much of the past two years, the flagship digital asset has often traded as a benchmark for simpler financial conditions, lower real returns and increasing liquidity.
Wednesday’s meeting has a different set of inputs. A Fed that raises inflation forecasts, keeps the middle path restrictive and signals caution on cuts would reduce the case for a rapid expansion in risk appetite, even if digital assets have held firmer than some stock benchmarks during the latest geopolitical shock.
Powell’s term adds a second clock for the markets
There is also a second timeline at play. Powell’s current term as chairman ends on May 15, 2026, although his term as a member of the Board of Governors runs until January 31, 2028, according to the Federal Reserve.
That distinction has become important for investors trying to figure out policy after Wednesday’s decision. A seat change that once seemed easy has become less certain as Trump’s nominee, former Fed Governor Kevin Warsh, remains stuck in the Senate.
Warsh’s appointment remains on hold as the legal battle surrounding the Justice Department’s investigation into Powell continues. So if Warsh is not confirmed by the June 16-17 FOMC meeting, Powell will continue to lead rate-setting meetings even after his term ends.
That possibility extends the period during which markets may still trade Powell’s policy framework, even as Trump continues to express his preference for lower interest rates and a different leadership style at the Fed.
For Bitcoin, this adds a second layer of interpretation to the Fed meeting. Investors would read Wednesday’s projections for clues about 2026, and they would also wonder how much of the medium-term path could change once the leadership question is resolved.
That doesn’t guarantee a cleaner policy path for cryptocurrencies or broader risk assets. A delayed transition, friction in the Senate and ongoing legal disputes surrounding Powell all add uncertainty to the schedule that investors had expected to guide the second half of the year.
Bitcoin’s recovery meets a policy test
Bitcoin has recovered from the sharp drop that took it below $60,000 earlier this quarter, but the market is still trading well below record levels seen late last year.
Citigroup cut its 12-month Bitcoin target to $112,000 from $143,000, citing stalled progress on U.S. crypto legislation and a narrowing window for regulatory catalysts that could support ETF demand and broader institutional adoption.
In the same note, Citi described $70,000 as an important level for BTC as the market awaits policy and regulatory guidance.
However, industry experts believe that BTC could aim higher given the current business accumulation, which remains part of the support structure. Crypto market maker Wintermute said:
“The setup is more constructive than it has been in months. Coinbase’s premiere set, ETF inflows and institutional agency flows are all pointing in the same direction. The mid-60s appears to have attracted a real bottom of institutional bidding.”
For context, Bitcoin ETFs are currently experiencing their strongest inflows since October of last year, with seven days of consecutive positive cash additions totaling $1.1 billion.
At the same time, Strategy (formerly MicroStrategy) continues to aggressively expand its BTC holdings. The company acquired over 40,000 BTC this month, increasing its holdings to 761,068 Bitcoin.
These purchases show that the market’s largest corporate buyers are still increasing their exposure at prices close to where Bitcoin is trading now, even as interest rate uncertainty remains unresolved.
That steady demand has helped build a base of buyers beyond short-term macro traders and currency market-based momentum accounts.
Taking this into account, the next technical and derivatives reference point is around $80,000. CME Group said a March 6 market note indicated that the $80,000 call strike carried high open interest, making it a focal level for market participants.
That shows where traders have concentrated their exposure as Bitcoin tries to stabilize after a deep decline in the first quarter. A move to that level after the Fed decision would likely draw more attention from options firms and short-term hedges, especially if Powell leaves the door open for easing later this year.