Bitcoin Hovers at $104K Ahead of Fed's Trump-Pressured Decision

Bitcoin sellers wait at $104K as Fed faces Trump rates pressure at FOMC

Bitcoin traders are bracing for a pivotal Federal Reserve meeting, with the cryptocurrency's price hovering around $104,000. The market is anticipating the Fed's interest rate decision and Chair Jerome Powell's commentary, which could influence the trajectory of risk assets, including Bitcoin.

President Donald Trump has been advocating for a notable reduction in borrowing costs, putting pressure on the Federal Reserve. Analysts emphasize the importance of preserving market confidence and warn against presidential interference in monetary policy, which could spark inflationary pressures.

Bitcoin has been trading in a tight range ahead of the FOMC meeting, with the $100,000 level acting as a crucial psychological support level. Traders are on edge, as any shift in policy could set the tone for Bitcoin's next move. If the Fed maintains its current stance and keeps rates steady, as widely expected, Bitcoin's reaction may remain muted in the short term. However, a more hawkish stance could weigh on Bitcoin's price, as a stronger dollar typically makes risk asset classes like cryptocurrencies less attractive to investors.

Analysts are divided on the potential impact of DeepSeek on risk assets. While some argue that lower AI-related prices could ultimately reduce inflation, benefiting risk assets like Bitcoin, others caution that the market remains volatile and uncertain. Despite the ongoing uncertainty, institutional interest in Bitcoin continues to grow, with total net inflows to Bitcoin ETFs reaching $38 billion over the last year.

Geoffrey Kendrick from Standard Chartered notes that recent regulatory adjustments, such as the removal of accounting rule SAB 121, could pave the way for U.S. institutions to engage more in the digital asset arena. He predicts that the long-only sector, valued at around $40 trillion, will begin to invest more significantly in Bitcoin by 2025, suggesting potential influxes in demand throughout this year.

As the market awaits the Fed's decision, traders are advised to remain vigilant and informed. The potential for policy shifts from the Federal Reserve could either bolster or hinder Bitcoin's upward momentum. Staying abreast of macroeconomic indicators and Fed communications will be essential for navigating the unpredictable waters of cryptocurrency trading.