Federal Reserve Holds Rates, Bitcoin Drops 2.3%

The Federal Reserve has decided to maintain interest rates at 4.25%-4.5%, citing economic uncertainty and persistent inflation concerns. This decision comes alongside a downward revision of the GDP growth forecast for 2025, from 2.1% to 1.7%, and an upward adjustment in inflation expectations, from 2.5% to 2.7%. Chair Jerome Powell acknowledged the challenges in balancing inflation control with financial stability, adopting a cautious approach moving forward. Investors are closely monitoring how these projections will influence shares, bonds, and cryptocurrency markets in the coming months.

The Fed's decision to keep interest rates stable, rather than raising them, has led to a mixed market reaction. Bitcoin initially fell by 2.3% to $82,750 before rebounding, indicating a brief dip in the cryptocurrency sector. Typically, higher interest rates suppress risk assets, but the Fed's decision to hold rates steady has provided some relief. The next few months will be crucial in determining whether the economy can avoid a more severe slowdown.

Bitcoin, after a significant rise, is currently trading at $85,972 and consolidating within a range. The cryptocurrency recently tested resistance near $87,200 before retracing. If Bitcoin can maintain support above this level, another breakout attempt toward $87,600 is possible. However, a failure to hold this support could lead to a decline toward $84,200 in the near future. Prior to the Fed meeting, Bitcoin exhibited bullish momentum, demonstrating the resilience of cryptocurrencies over time and the conviction in Bitcoin.

The Federal Reserve's decision to keep interest rates stable reflects ongoing economic instability. Investors remain cautious as the central bank navigates the delicate balance between economic stability and inflation control. Following a volatile day, Bitcoin is currently trading around $85,972, aligning with broader market reactions. Its next movement will be influenced by major resistance at $87,200 and support at $85,400. As macroeconomic conditions evolve, risk assets, including cryptocurrencies, will continue to be sensitive to changes in Federal Reserve policy.