Bitcoin (BTC) traded at $74,000 on Wednesday, 2.6% below its six-week high of $76,000 reached on Tuesday, as traders brace for volatility following the US interest rate decision.
Key takeaways:
The odds of the US Federal Reserve leaving interest rates unchanged today are 100%.
BTC price may drop as low as $60,000 if support between $72,000 and $65,000 breaks.
100% chance interest rates won’t change
Data from TradingView shows that after breaking out of range on Friday, the BTC/USD pair has formed daily candle highs, but was unable to break the resistance at $76,000.
BTC/USD daily chart. Source: Cointelegraph/TradingView
With the ongoing Federal Open Market Committee (FOMC) meeting on March 17-18, markets could see volatile price swings toward key BTC price levels over the next few days. The interest rate decision will be announced on Wednesday at 2:00 PM ET.
Related: Bitcoin holds $70K, bringing spot ETF buyers close to breakeven: Is the bull market back?
Polymarket bettors price in a 100% chance that the current interest rates will remain between 3.5% and 3.75%, leaving less than 1% probability of a 0.25% rate cut.
Target rate possibilities for the March 18 FOMC meeting. Source: Polymarket
Futures market traders have also locked in a 98.9% chance that the Fed will leave the interest rates unchanged, with virtually no chance of a 25 bps reduction.
However, market participants say that any downside price action from unchanged interest rates is already priced in.
Meanwhile, there are other sources of volatility that traders have to contend with, including the US and Israel-Iran war, US inflation concerns and oil price spikes, along with Federal Reserve Chair Jerome Powell’s speech after the FOMC meeting.
US President Donald Trump has again pressured Powell to cut interest rates, saying on Truth Social on Thursday that the Fed chair should reduce borrowing rates immediately.
The market will keenly watch Powell’s language at the FOMC news conference to see if there is any shift in tone.
🇺🇸 TODAY: FOMC decision at 2:00 PM ET, followed by Powell’s press conference at 2:30 PM ET.
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