Cryptocurrencies price consolidated on Wednesday, with no significant gains or losses as traders awaited the Federal Reserve’s decision on interest rates. Bitcoin price fluctuated in the $82K to $83K range while Ethereum and XRP recorded a modest 1.5% and 0.4% gain, respectively. The total crypto market cap had also dropped by 1.4% to $2.8 trillion. This analysis explores how today’s FOMC meeting could impact crypto prices.
Cryptocurrencies Price In Focus Ahead of FOMC
Today’s Federal Open Market Committee (FOMC) meeting will be a major price mover across the cryptocurrencies and stock markets. Despite last week’s CPI print showing that inflation has cooled to 2.8%, 99% of investors at the CME expect that Fed officials will leave interest rates unchanged.
Analysts from Bank of America who spoke with Reuters noted that the March 19 FOMC meeting will be more about policy uncertainty, as Fed officials deliberate about whether inflation is on track to falling to the 2% target.
With markets already pricing in zero rate cuts, the focus will be on the speech by Fed Chair Jerome Powell for clues on whether he has shifted to a more dovish stance. Per analyst Crypto Ideology,
“What truly matters isn’t just the rate decision, it’s Powell’s tone and the forward guidance. Markets will be watching for any hints on future cuts, especially with June and July meetings in sight. Hold or not, volatility’s guaranteed.”
Powell’s speech may also offer insights into how policymakers view Trump’s trade policies and tariff plans, which have caused economic uncertainty. The Bank of Japan has cited higher US tariffs as the main reason for keeping rates steady.
Crypto Market Forecast With Fed Likely to Maintain Hawkish Stance
If Powell’s speech and the FOMC minutes reveal a hawkish stance, it will most likely stir a decline in cryptocurrencies price. Moreover, with no bullish catalyst in sight and top analysts predicting that the bull market has ended, the bearish impact of zero rate cuts and Powell’s speech could extend into Q2 2025.
Meanwhile, Polymarket odds of the Fed ending quantitative tightening by June 2025 have soared to 100%. CME also prices in a nearly 60 basis points rate cut by year-end, paving the way for crypto prices recovery in the second half of 2025.
Popular analyst Crypto Rover notes that if Powell were to say something positive in his speech, it could cause a price explosion for stocks and cryptocurrencies. At the same time, trader Kale Abe says that,
“I just don’t see how FOMC can be bearish. The bearish situation is literally almost 100% priced in.”
The Volmex Implied Volatility Index for Bitcoin and Ethereum has also dropped, indicating fewer speculative trades ahead of the FOMC report. This further proves that the market may have priced in the event.
Therefore, it is likely that cryptocurrencies price might continue trading within a tight range or drop slightly after the FOMC meeting. However, the crypto market will do well in the long term as investors anticipate at least two rate cuts in 2025.
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