Crypto Traders Monitoring Federal Reserve: What Will Be The FOMC Effect on BTC?

As the Federal Reserve FOMC meeting takes place today, economists anticipate that interest rates will remain steady within the 4.25% to 4.5% bracket. What might be the BTC implications from the FOMC? Could BTCUSDT surpass $110,000?

BTC, Solana, and several of the top cryptocurrencies in the leading 20 are trading in narrow ranges. Bitcoin ▼-1.85% has dipped, staying below $105,500, whereas ETH ▼-1.51% has not yet surpassed $3,000. In contrast, SOL ▼-1.37% is finding it difficult to hold above $170, declining 11% within the past 24 hours, making it one of the biggest losers in the top 10, behind DOGE ▼-0.83%.

Clearly, the crypto asset market and its participants are adopting a careful approach. With the highly awaited Federal Open Market Committee (FOMC) meeting approaching in the United States, BTC traders are focused on one pivotal question: Will the Federal Reserve’s decision today alter the trajectory for crypto assets, inciting a buyer interest surge that pushes prices over crucial liquidation thresholds?

This inquiry holds significance: Inflation, tariffs, and an unusually unstable macroeconomic setting, exacerbated by conflicts in the Middle East, are at the forefront of discussions, necessitating the central bank to act judiciously.

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The FOMC Quandary: Will Rates Be Maintained or Reduced?

The majority of economists and analysts predict that rates will stay constant in the 4.25% to 4.5% range.

Based on the CME FedWatch tool, there is an overwhelming 99.9% chance that the central bank will keep rates steady.

(Source)

Despite the consensus leaning towards steady rates, BTC traders will be attentive to the remarks made by Federal Reserve Chair Jerome Powell during the press briefing.

This is crucial, as while interest rates are a primary focus, the central bank’s insights and future guidance are of equal importance.

Similar to the press conference on May 7, minimal changes are anticipated.

Powell is expected to take a data-dependent approach, especially in light of President Trump’s assertive tariff policies and mixed economic indicators, particularly regarding inflation.

Additionally, the Federal Reserve is managing a sensitive equilibrium between maintaining low rates around the benchmark 2% and fostering economic growth amidst escalating debt levels.

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Effects of FOMC on BTC

Historically, as observed in the 2021 digital currency surge, Bitcoin and cryptocurrency values flourish during periods of reduced interest rates.

When the central bank relaxes its monetary policy, a greater amount of money circulates, some of which is funneled into Bitcoin and other “high-risk” crypto assets, including many of the leading Solana meme coins.

During these phases, inflation generally rises as well.

However, the macroeconomic scenario in 2025 differs from that of 2021.

The global economy is contending with trade disputes, labor trading market unpredictability, and stagflation brought on by enduring inflation and sluggish economic growth.

While core inflation moderated in May 2025, it remains heightened, and tariffs could renew price pressures, particularly if no agreement is achieved with the European Union and China.

Thus, if the Federal Reserve unexpectedly reduces rates contrary to analysts’ predictions, Bitcoin’s value could surge. There exists a possibility that it may exceed $110,000 by the week’s conclusion.

Nonetheless, even if rates are decreased, the timing could create challenges. This perspective considers the inflationary threats posed by tariffs and an economy in decline.

Consequently, an unexpected rate cut could incite a capital shift towards the USD and treasuries, potentially leading to sudden sell-offs in cryptocurrencies as the dollar gains strength.

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