Bitcoin (BTC) price hovers near key resistance levels as global markets await Fed's interest rate decision

The price of Bitcoin is hovering near key resistance levels as global markets await the U.S. Federal Reserve's interest rate decision, expected later today.

The price of Bitcoin is hovering near key resistance levels as global markets await the U.S. Federal Reserve's interest rate decision, which is expected to be announced later today and may influence the cryptocurrency's direction over the coming weeks.

At the same time, traders are growing increasingly anxious as economic uncertainty mounts and inflation remains a concern. All eyes will be on Chair Jerome Powell's upcoming statement, which may have a significant impact on Bitcoin's performance.

Bitcoin rose to $96,921.96 on Wednesday, edging closer to the crucial $100,000 threshold. The rally is positioning traders for the Federal Open Market Committee (FOMC) announcement at 2 P.M. ET.

While the market broadly anticipates the Fed to maintain interest rates at 4.33%, attention has shifted to the tone and detail of Chair Powell's press conference.

It is noteworthy that over the past several months, Bitcoin has shown a heightened reaction to macroeconomic data and central bank signals, particularly following the approval of spot Exchange-Traded Funds. This has increased institutional interest and subsequently tightened Bitcoin's link with traditional financial markets.

Consequently, monetary policy updates now carry more weight for Bitcoin than ever before.

The United States economy declined during the first quarter of 2025, displaying signs of weakness after a stronger finish to 2024. Real GDP fell by 0.3%, and consumer spending slowed sharply.

At the same time, inflation has remained persistent. The core Personal Consumption Expenditures (PCE) price index, a key inflation measure for the Federal Reserve, rose to 3.5%, well above the central bank's 2% target.

These numbers place the Fed in a difficult spot. While slowing growth usually prompts a rate cut, rising inflation and new trade tariffs make it harder for the bank to shift toward easier policy. Most economists believe the Fed will need to cut rates eventually, according to a CNBC Fed Survey. However, for now, Polymarket data suggests a 2% chance of a rate cut today.

Bitcoin faces key levels as traders watch for clues

Bitcoin's next move may hinge entirely on Powell's tone. If the Fed acknowledges economic weakness and signals a willingness to ease policy later in the year, Bitcoin could break above the $98,000 resistance and retest all-time highs. Some analysts believe it may push beyond $100,000 if dovish guidance and ETF flows align.

However, a more hawkish stance focusing on inflation risks could lead to a drop. Support is currently seen at the $92,000 to $94,000 levels, with further downside possible if traders sell on disappointment. A neutral or vague statement could also cause price swings, especially given the thinner liquidity typical around Fed events.

In other developments, two long-dormant Bitcoin wallets from 2013 recently transferred 20,000 BTC, amounting to approximately $325 million, ahead of the Federal Reserve's impending interest rate decision. The wallets, which had been inactive for over a decade, suddenly came to life and executed the massive transfer on Tuesday.

For now, traders are remaining cautious. With Bitcoin at a critical juncture and the Fed's decision just hours away, the market is bracing for heightened volatility.