Key Takeaways
Bitcoin hovered below the $80,000 level ahead of a critical week for global markets, with five central banks including the US Federal Reserve set to announce monetary policy decisions that will shape the outlook for risk assets.
"The market is pricing in no rate cuts until the middle of next year," Lawrence Gillum, chief fixed income strategist for LPL Financial, said in a note. At press time, data from Polymarket showed a 99.9 percent probability of the Fed holding rates steady.
The Federal Open Market Committee (FOMC) is widely expected to maintain the federal funds rate at its current range of 3.50%-3.75% on Wednesday. The decision comes as March headline inflation hit a two-year high of 3.3 percent and traders watch for Thursday's Core PCE print, forecast at 3.2 percent year-over-year. For Bitcoin, the event carries significant weight; the price has dropped after every FOMC announcement from July 2025 until last month, according to analysis from one trader on X.
The immediate risk for Bitcoin is a potential "sell-the-news" event, where a price pump ahead of the FOMC statement is followed by a selloff. One technical analyst noted a potential bear flag pattern on the BTC chart, suggesting a retest of the lower border of its recent rising channel could be imminent if a correction occurs post-announcement.
The Fed's decision is the main event in a packed week that also includes a policy announcement from the Bank of Japan. The BoJ is expected to hold its policy rate at 0.75 percent, further highlighting the policy divergence that has weighed on the yen and influenced global capital flows.
Adding another layer of uncertainty is the potential leadership transition at the Federal Reserve. Wednesday's FOMC meeting may be the last for Chair Jerome Powell, whose term expires on May 15. The Senate Banking Committee is scheduled to vote on the nomination of his proposed successor, Kevin Warsh, on the same day as the rate decision, introducing leadership-transition risk for the US Dollar and associated assets.
From a technical perspective, Bitcoin's recent rally above $79,400 has formed what one analyst on X, alias JDK Analysis, described as a potential lower high within a multi-month bear flag. A rejection at this level could lead to a significant selloff, with the next major support located at the lower boundary of the current channel.
This article is for informational purposes only and does not constitute investment advice.
