Bitcoin Price Analysis: BTC Rallies As Fed Keeps Interest Rates Unchanged

Bitcoin (BTC) surged to a 10-day high, rising over 5% on Wednesday to a peak of $87,038 after the rate-setting Federal Open Market Committee (FOMC) left interest rates unchanged, aligning with market expectations. The flagship cryptocurrency is up over 3% in the past 24 hours and trading at $85,458. 

Spot Bitcoin ETFs registered over $500 million in inflows leading up to the meeting as institutional interest and demand returned. 

Bitcoin (BTC) Surges Past $85,000

Bitcoin (BTC) rallied after the Federal Reserve kept interest rates unchanged. The flagship cryptocurrency broke above key levels as the Fed’s decision and easing market conditions boosted risk appetite. After cooler-than-expected inflation numbers in the CPI and PPI data earlier in the month, markets had priced in a high chance of a rate pause. The Federal Reserve also announced that it was slowing the pace of reducing its $6.8 trillion balance sheet and capping the runoff of Treasury securities at $5 billion per month, significantly down from the previous $25 billion. The move hopes to prevent disruptions in funding markets amid ongoing debt ceiling tensions. 

While leaving interest rates unchanged in the 4.25%-4.50% range, the Federal Reserve hinted at two rate cuts later in the year despite rising inflation concerns. Financial conditions are also fueling investor risk appetite, with the US Dollar registering its third-largest three-day decline since 2015. Treasury yields and bond market volatility have also registered a sharp decline. According to Jamie Coutts, the Chief Crypto Analyst at Real Vision, the current market shifts could set the stage for a significant rally. 

“Now, with the PBoC ramping up liquidity measures, the market may be underestimating how quickly Bitcoin could surge—potentially hitting new all-time highs before Q2 is out—despite ongoing concerns around Trump tariffs and a possible recession.”

The People’s Bank of China recently injected additional liquidity into the financial system, reinforcing a global easing trend that could favor risk assets. The Federal Reserve’s decision to slow its quantitative tightening aligns with the broader market narrative. 

Fed Keeps Interest Rates Unchanged 

The Federal Reserve maintained interest rates at 4.25%-4.50% for the second consecutive time. The committee also said it would slow quantitative tightening, with several members still expecting a 50 basis-point rate cut in 2025. 

“Fed projections imply 50 bps of rate cuts in 2025, 50 bps more in 2026.”

Federal Reserve Chair Jerome Powell said policymakers are in no rush to cut interest rates and will continue to monitor economic developments. He also stated that tariffs, a major part of Donald Trump’s trade wars, have raised expectations of a recession in the US economy, increasing economic uncertainty. Additionally, the Fed revised its GDP growth projections to 1.7%, down from the 2.1% forecasted in December. The Fed may be forced to cut interest rates if the economy continues sliding toward a recession. 

As a result of the Fed’s decision, several cryptocurrencies, including Bitcoin, rallied as the crypto market cap surged to $2.9 trillion. Another reason for the price jump could be news that President Trump will be speaking at the Digital Asset Summit (DAS). Trump is expected to share information about his crypto policy at the event. The crypto market’s recovery is also attributed to its correlation with the traditional markets, which registered notable gains following the Federal Reserve meeting. Crypto intelligence firm Santiment stated, 

“Look for cryptocurrency markets to closely mirror the S&P 500 throughout the indefinite future, though individual altcoins can continue to see increased unpredictability and volatility.”

Donald Trump Expected To Speak At Digital Asset Summit 

US President Donald Trump will be speaking at Blockworks' Digital Asset Summit (DAS) in New York City, the first time a sitting President will address a Bitcoin and cryptocurrency conference. The development comes only days after Trump signed an executive order to establish a strategic Bitcoin reserve, making BTC a key asset in the country’s financial framework. 

“BREAKING: President Trump will address DAS tomorrow. This is the first time a sitting President has addressed a crypto conference.”

Trump’s appearance highlights the government’s growing interest in Bitcoin and other digital assets. The President is expected to discuss the future of Bitcoin and the broader crypto market. 

Bitcoin (BTC) Price Analysis 

Bitcoin’s (BTC) price action picked up over the past few sessions, culminating in a surge past the 20 and 200-day SMAs to a peak of $87,038. BTC had dropped to a low of $76,642 last Tuesday as selling pressure intensified. However, the flagship cryptocurrency bounced back, rising 5.50% to reclaim $80,000 and settle at $82,943. BTC continued pushing higher on Wednesday despite facing selling pressure, registering an increase of almost 1% and settling at $83,798. However, buyers lost momentum on Thursday as the price fell over 3% to $81,136. BTC rebounded on Friday as markets rallied. As a result, the price surged past the 200-day SMA, reaching an intraday high of $85,363 before settling at $84,002, an increase of 3.53%.

Source: TradingView

BTC registered a marginal increase on Saturday and moved to $84,398. Buyers lost momentum on Sunday as the price dropped over 2%, slipping below the 200-day SMA and settling at $82,611. BTC started the current week on a bullish note, rising almost 2% and settling at $84,016. Selling pressure intensified on Tuesday as the price plunged to an intraday low of $81,187 before rebounding to settle at $82,725, ultimately registering a decline of 1.54%. Markets recovered on Wednesday following the FOMC meeting, with the Fed leaving interest rates unchanged. As a result, BTC surged over 5%, moving past the 20 and 200-day SMAs and $85,000 to settle at $86,875. However, the current session sees BTC back in the red, down nearly 2% and trading at $85,206. Sellers will look to retain control and drive BTC back below $85,000 and the moving averages. On the other hand, buyers will look to build momentum, consolidate, and push towards $90,000.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.