Bitcoin has recovered above $112,900 after testing lower levels in previous sessions. Meanwhile, Ethereum is trading around $4,000 at the time of writing, showing a weekly gain of 4% and a daily loss of 3%. Traders are now focused on the Federal Reserve’s rate decision, expected later today.
Meanwhile, the central bank is widely expected to announce a 25 basis point rate cut at 2 PM ET. Markets see the move as fully priced in, but attention has shifted to the statement that follows and how Chair Jerome Powell presents the outlook.
Statement Language Will Set the Tone
Market watchers are looking closely at the Fed’s wording. If today’s cut is described as a “mid-cycle adjustment,” investors may view it as a limited move, reducing the chance of more cuts this year. In that case, risk assets could stay flat or pull back.
If the statement suggests that economic risks are growing, it could signal the door is open for more easing. That may lead to lower bond yields and a weaker dollar. In previous cycles, these shifts have supported buying in assets like equities and crypto.
Bull Theory explained that traders are more focused on Powell’s comments. “If Powell acknowledges slower growth or highlights confidence that inflation is under control,” that would be taken as a signal that the Fed is open to further cuts. But they added, “If Powell stays cautious,” the market could stall.
Balance Sheet Policy May Shift
Some investors expect the Fed to announce the end of quantitative tightening. This would mean the central bank stops reducing its balance sheet and could mark a change in liquidity conditions.
The move, if confirmed, would suggest a more supportive stance. For markets, this may matter more than the rate cut itself. Traders will be watching closely for any change in language during Powell’s press conference at 2:30 PM ET.
Crypto Traders Position Around Key Levels
Bitcoin has shown a slow recovery from recent lows. Analyst Michaël van de Poppe said support levels are holding for now. “Volatility should be going up enormously today,” he said, warning against using leverage ahead of the announcement.
Ethereum is trading in a tight range after a brief drop to the $3,900–$3,950 zone. Analyst Ted said, “This selling is likely tied to de-risking ahead of the FOMC meeting,” adding that price rebounded quickly after the move.
Bitfinex researchers noted in a recent report that macro changes could shift liquidity into crypto. With volatility in oil and foreign exchange markets, investors may be looking to reposition in digital assets over the next few weeks.
