Bitcoin Plunges to $102k as FOMC Meeting Looms

Bitcoin Price Drops to $102k as FOMC Meeting Nears

The crypto market experienced a significant shift on January 29, 2025, as Bitcoin's price dropped to $102k in anticipation of the upcoming Federal Open Market Committee (FOMC) meeting. This event, the first under the new Trump administration, has sparked considerable interest and speculation among investors and traders alike. The Fed's decisions on interest rates, forward guidance, and liquidity policies are expected to have a significant impact on the crypto market, particularly on Bitcoin (BTC), Ethereum (ETH), and altcoins.

The market is currently pricing in a 97% chance of no rate cuts, with the focus shifting to Fed Chair Jerome Powell's post-meeting press conference at 2:30 PM ET. Key themes for the meeting include the interest rate outlook, forward guidance on inflation, and quantitative tightening (QT). While no immediate rate cuts are expected, markets are keen to gauge whether the Fed might shift its stance for March or May, particularly in response to softening inflation metrics like Core PPI. Powell's comments on inflation and economic conditions could reveal the Fed's trajectory for 2025, with a dovish tone potentially fueling risk-on sentiment and a hawkish approach dampening optimism. Persistent signs of stress in dollar funding markets may push the Fed to signal an end to QT, which would be bullish for liquidity-sensitive assets like crypto.

Two possible scenarios have emerged in relation to the FOMC meeting's impact on the crypto market. In a dovish scenario, Powell signals a more accommodative stance, such as early rate cuts or a slowdown in QT. This could lead to a Bitcoin breakout, with BTC price surging past its recent highs and potentially aiming for the $110K+ range. Additionally, a dovish tone may trigger a rotation into altcoins, fueling the Altcoin Market Cap (TOTAL3) and kickstarting a long-awaited altseason. Lower rates and eased QT would also inject liquidity into markets, benefiting risk assets like Ethereum and speculative tokens. This scenario aligns with President Trump's recent remarks favoring low interest rates, which could add political weight to the Fed's decision-making.

In a hawkish scenario, the Fed emphasizes inflation risks and delays rate cuts. This could