FOMC Rate Decision Preview: Bitcoin and Ethereum Market Impact Analysis
Ahead of the Fed FOMC meeting, analyze Bitcoin and Ethereum moves under pause, cut, and hike scenarios, plus key resistance and market sentiment.
#1. Pre-FOMC Market Overview
In early U.S. market trading, massive capital briefly flowed in—around $600 billion—but quickly flowed out, dragging down risk assets including Bitcoin. Bitcoin fell from the $65,600–$65,800 zone to near $62,600 and is now fluctuating around $64,300. The short-term market remains in a downtrend, with clear divergence between bulls and bears.
#2. Three Rate Scenarios and Probability Distribution
Market expectations for this FOMC outcome are roughly as follows:
- Hold rates unchanged (3.75%): probability about 70%, viewed as the base case. If realized, the market may remain range-bound.
- Rate hike: probability about 30%; if it occurs, it could trigger further declines.
- Cut to 3.5%: extremely low probability (below 3%, some views say only about 1%); if it happens, it would significantly benefit risk assets.
The post-meeting remarks by current Fed Chair Kevin Warsh will be key. The rate decision will be announced at 23:30 India time and midnight Bangladesh time, followed by the chair's comments providing more policy guidance. If the remarks suggest sticky inflation and possible future hikes, the market will likely face pressure; if they emphasize a pause or signal easing bias, there could be marginal improvement.
#3. Next Data Window and Upcoming Meetings
There is no FOMC meeting in August; the next meeting is in September, followed by October and December. Therefore, August CPI, employment, and other data will directly affect September rate hike expectations. If inflation data remain elevated, the probability of a September hike could rise, putting pressure on the crypto market.
#4. Technicals: Key Resistance and Volatility Risk
For the short-term downtrend to reverse, Bitcoin at least needs a daily close above $66,700. That signal has not yet appeared. Sharp manipulation and false breakouts are common around FOMC meetings. Prices could first spike to $65,300–$65,800 before the decision and then pull back, or dip slightly to near $64,200 and wait for the decision before choosing a direction. The $65,800–$66,400 area above is an important observation zone; if it cannot be broken, rebound momentum will be limited.
#5. ETH Attracts More Capital Attention Than BTC
Compared with Bitcoin, Ethereum has been relatively stronger recently. In terms of fund flows, on the previous day ETH recorded net inflows of about $9.4 million, while BTC saw net outflows of about $49 million. The day before, ETH still had net inflows of about $11 million, while BTC had net outflows of about $11 million. If the overall market can break above $66,800, ETH is likely to gain stronger rebound momentum and could lift sentiment in some altcoins. However, if ETH breaks below current key support, it could reopen downside space and create opportunities for staged attention.
In terms of allocation, some views suggest moderately reducing altcoin exposure and keeping the portfolio centered on BTC and ETH, for example BTC at 50%–60% and ETH around 30%, while using small, staged positions to manage volatility. This is for research reference only and not investment advice.
#6. Risk Disclaimer
Cryptocurrency markets are highly volatile, and a single macro event can trigger sharp spikes and drops. Liquidity is thinner around FOMC meetings, raising manipulation risk. This content is for informational and educational purposes only and does not constitute financial advice. Please exercise independent judgment and manage risk properly.
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