Bitcoin Surges as Markets Brace for Fed’s Next Move

Bitcoin Rides the Fed Wave

Bitcoin’s price surged on March 19, igniting optimism among traders ahead of the Federal Open Market Committee (FOMC) minutes release and Federal Reserve Chair Jerome Powell’s press conference. With market participants eagerly awaiting insights into the central bank’s stance on inflation, interest rates, and overall economic health, BTC found new momentum amid the speculation.

Bitcoin price trends
BTC/USDT 1-day chart. Source: TradingView

Powell Holds Steady on Interest Rates

Traders closely analyze every word from Powell and the FOMC, searching for clues about the future of monetary policy. This time, Powell confirmed that interest rates would remain unchanged in the 4.25% to 4.5% range, a level set since December 2024.

While the Fed slightly reduced its economic growth expectations and reaffirmed its commitment to tackling inflation, there were no shocking revelations. Markets, having largely anticipated this stance, reacted positively.

Signs of a Softer Approach?

One key takeaway from the FOMC minutes was the confirmation of a slowdown in the central bank’s policy of quantitative tightening (QT). The Fed announced a significant reduction in the monthly redemption cap on Treasury securities, slashing it from $25 billion to $5 billion.

This adjustment, while small, is a step toward easing financial conditions, which traders in both crypto and equity markets had been hoping for.

Fed's policy changes
Changes to FOMC statement (in red). Source: FederalReserve.gov

Related: Bitcoin price volatility ramps up around FOMC days — Will this time be different?

Bitcoin Responds with a Rally

With the Fed’s position largely aligning with expectations, Bitcoin extended its gains, hitting an intraday high of $85,950. Wall Street also cheered the update, with the Dow Jones Industrial Average climbing 400 points and the S&P 500 adding 77 points.

Powell’s acknowledgment that two additional rate cuts are on the table for 2025 resonated positively with investors, potentially fueling further upside in Bitcoin and risk assets. Traders are now eyeing whether BTC can maintain this bullish momentum and break through key resistance levels in the coming weeks.

What’s Next for Bitcoin?

With the Fed appearing to take a measured approach, the stage seems set for Bitcoin’s next moves. If easing monetary policy remains on the horizon, the crypto market could continue to benefit. However, macroeconomic uncertainties still loom, and traders should remain vigilant.

As always, this is not financial advice—invest smartly and do your research.

Disclaimer: Every investment and trading decision involves risk. Conduct your own research before making any financial commitments.