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Trump's Rate Demands Stir Bitcoin Market Tension Ahead of FOMC

Coin WorldWednesday, Jan 29, 2025 1:52 pm ET

1min read

Bitcoin Traders Anticipate Effects of Trump’s Rate Demands on Fed Decisions and Market Volatility

Bitcoin traders are closely monitoring the potential impact of President Donald Trump's demands for lower interest rates on the Federal Reserve's hawkish policies. As the upcoming Federal Open Market Committee (FOMC) meeting approaches, the market sentiment is cautious, with traders prioritizing stability over volatility during this pivotal moment.

The market is highly responsive to macroeconomic signals, with BTC/USD hovering around the $100,000 mark. President Trump's insistence on reducing interest rates, articulated during a virtual address at the World Economic Forum, has created external pressure on Fed Chair Jerome Powell, who has historically adopted a more hawkish approach.

Analyst perspectives suggest that while Trump's rhetoric may influence public opinion, the likelihood of the Fed yielding to these demands appears minimal. This tension could result in unexpected market reactions, especially if the Fed's announcements do not align with Trump's assertions.

On the day leading up to the FOMC announcement, Bitcoin's price exhibited modest volatility, fluctuating within a tight range. With the critical support level established at $96,000, traders are on guard for significant price movements. Notably, the latest data from CME Group’s FedWatch Tool indicates that market expectations are chiefly skewed toward maintaining the existing interest rates, causing ripples in risk asset markets, including cryptocencies.

As popular trader Pierre highlighted, a move beyond $103,000 could signify a substantial breakout for Bitcoin. He noted, “Friendly reminder that Powell’s day usually comes with several waves of volatility,” underscoring the potential for rapid market shifts post-announcement.

In the lead-up to the FOMC meeting, analysis from CoinGlass indicates that liquidity is strengthening just below the $104,000 threshold. This highlight points to a strategic mindset among traders as they prepare for possible volatility and significant shifts in market sentiment. BTC is currently positioned delicately within its short-term trading range, with critical support and resistance levels being closely monitored.

Support Level: $96,000

Resistance Level: $103,000

As the FOMC meeting unfolds, traders are advised to remain vigilant and

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