Crypto Market Dips as Traders Await Fed Decision, Bitcoin Holds Steady
Analysts at QCP Capital suggest that while a rate cut remains unlikely, any dovish stance from the Federal Reserve could trigger upward momentum for bitcoin, potentially lifting altcoins along with it.
The broader crypto market saw minor declines on Tuesday, with Dogecoin (DOGE) and XRP leading losses among major tokens, each falling just over 3% in the past 24 hours. The CoinDesk 20 Index (CD20), which tracks the wider crypto market, dropped 2%.
The muted price action comes as bitcoin (BTC) traders await Wednesday’s Federal Open Market Committee (FOMC) meeting, which is expected to shape monetary policy and influence risk assets, including cryptocurrencies.
The Federal Reserve is widely expected to keep interest rates steady at 4.25%–4.50%, but any remarks from Chair Jerome Powell could shift market sentiment. A hawkish stance—signaling tighter policy or a prolonged delay in rate cuts—may put downward pressure on bitcoin and deepen losses for altcoins. Meanwhile, a dovish tone, hinting at potential easing, could ignite a market rally.
“A rate cut this Wednesday is highly unlikely as the U.S. shifts away from fiscal dominance, where government spending drove growth, toward [President Donald] Trump’s focus on deficit reduction,” QCP Capital traders stated in a Tuesday broadcast. “This transition places greater weight on monetary policy. While we do not anticipate an immediate cut, any dovish signal from Powell could be the catalyst that sparks upside momentum.”
They also suggested that capital might be rotating out of Trump-driven momentum trades such as NASDAQ and bitcoin and into long-overlooked European and Chinese markets. Historically, crypto prices have lagged behind shifts in global liquidity trends, QCP Capital added.
Agne Linge of WeFi noted that market volatility remains elevated, with the crypto fear and greed index at 22, signaling “extreme fear” as investors contend with inflation concerns, trade tensions, and geopolitical risks.
“In the U.S., the S&P 500 and Nasdaq Composite recorded their fourth consecutive weekly declines last week, while the Dow Jones suffered a 3.1% drop—its worst weekly performance in nearly two years. Although last week’s downturn was unusually sharp, more uncertainty looms for the rest of the month,” Linge said, warning that macroeconomic challenges could weigh on bitcoin prices.
Ryan Lee, chief analyst at Bitget Research, noted that bitcoin remains range-bound, with a move toward either $75,000 or $90,000 equally possible depending on how traders interpret the Fed’s decision.
“Bitcoin’s recent pullback has traders closely watching support levels between $82,000 and $85,000. It’s a classic consolidation phase following a rally—healthy but also a test of whether the momentum can sustain itself,” Lee told CoinDesk in an email. “Any unexpected FOMC move could disrupt the market.”
“If sentiment turns bearish, Bitcoin could dip toward the $75,000–$80,000 range. However, a favorable macroeconomic backdrop might push it back toward $90,000,” he added.
