Bitcoin experienced a rebound on Wednesday morning as the cryptocurrency market gained momentum, while the U.S. dollar weakened ahead of an eagerly anticipated Federal Reserve announcement scheduled for later today.
Key Highlights
– Bitcoin is nearing a recovery above the $90,000 support level.
– The Federal Reserve is widely predicted to maintain current interest rates during today’s meeting.
– Technical analysis on Bitcoin’s 4-hour chart indicates a bullish pattern forming.
Data from crypto.news reveals that Bitcoin ($BTC) climbed from its Tuesday low of $87,315 and was trading near $89,310 at the time of reporting.
This upward movement in Bitcoin was mirrored by other major cryptocurrencies such as Ethereum (ETH), Binance Coin ($BNB), XRP ($XRP), and Solana (SOL), which all posted gains between 1% and 3%. Consequently, the overall crypto market capitalization rose by approximately 1.3% over the past day to reach around $3.1 trillion. These modest increases suggest that investors remain cautious and are awaiting clearer market signals before committing further capital.
Since January 15th, Bitcoin has been trending downward.
Tensions escalated recently due to tariff threats from former U.S. President Donald Trump targeting Canada over its free trade negotiations with China. This geopolitical strain contributed to a decline in the U.S. dollar, pushing it to levels not seen since early 2022.
The weakening dollar sparked strong rallies in precious metals like gold and silver—both hitting new highs this week—but this came at the expense of capital flowing out of cryptocurrencies.
You might also be interested in: Fundstrat’s Tom Lee predicts breakout moves for Bitcoin and Ethereum following peaks in precious metals prices.
Santiment’s latest social media analytics indicate that conversations currently favor gold and silver rather than digital assets like cryptocurrencies.
This environment saw stablecoins pegged to the U.S. dollar—namely Tether (USDT) and USD Coin (USDC)—drop to their lowest valuations since November 20th; these declines represent some of their steepest losses within recent days.
The withdrawal of liquidity coincided with steady outflows observed from spot Bitcoin exchange-traded funds listed in the United States. This lackluster buying interest ultimately caused Bitcoin’s price to slip below its crucial $90,000 support threshold.
What Will Happen To Bitcoin After The Fed Rate Announcement?
Caution dominates trader sentiment ahead of today’s Federal Reserve rate decision set for 2:00 PM Eastern Time.
The consensus among analysts expects no change in interest rates during this policy meeting—the current range stands between 3.50% and 3.75%. The Fed appears focused on evaluating how three previous rate cuts implemented late last year have influenced economic conditions moving forward into mid-2025 timelines or beyond according to some projections.
The CME FedWatch tool shows more than a 97% probability that rates will remain unchanged at today’s session.
Given these expectations are largely priced into markets already, maintaining steady rates could bolster positive sentiment toward riskier assets including cryptocurrencies like bitcoin.
Typically when central banks either pause hikes or hint towards easing monetary policy later downline paths tend toward risk-on behavior among investors seeking higher returns through assets such as stocks or cryptos alike.
Conversely if policymakers adopt hawkish rhetoric signaling future tightening measures sooner than expected then it may prompt corrections across speculative markets causing prices—including those within crypto—to fall sharply amid reassessments by traders who had grown overly optimistic earlier on trends aligned otherwise under different assumptions about inflation control efforts etcetera…
An Overview Of Recent Price Movements In BTC
A technical review using four-hour candlestick charts shows bitcoin trading inside an ascending parallel channel formation—a bullish pattern suggesting continued upward momentum so long as price remains confined within this channel boundary lines defining upper resistance & lower support zones respectively…
This structure implies potential sustained gains barring any decisive breakdowns below critical moving averages such as its commonly watched fifty-day simple moving average (SMA).
Mometum indicators reinforce optimism: MACD recently crossed upwards indicating bullish momentum remains intact prior possible retracements while Relative Strength Index readings display bullish divergence — both technical signals often interpreted by traders as buy cues supporting further upside potential soon enough…
If bitcoin decisively breaks above this channel — particularly surpassing resistance near its fifty-day SMA — it could trigger stronger buying pressure leading prices significantly higher heading into upcoming FOMC announcements later today…
Please note: This article does not constitute financial advice but serves educational purposes only.