Bitcoin Rallies After Fed Decision: FOMC Rate Hold Sparks Market Optimism
The U.S. Federal Reserve held interest rates steady between 4.25% and 4.5% during its latest March FOMC meeting, as widely anticipated. According to CME FedWatch data, there was a 98% probability of no rate hike, making the decision unsurprising — but its market impact is significant.
Although stable interest rates often create neutral sentiment for crypto, this time, things were different. The Fed also announced it would slow its balance sheet runoff starting April 1, signaling a more dovish approach through potential liquidity easing. For Bitcoin and the broader crypto market, this could be a bullish sign as increased liquidity tends to fuel digital asset demand.
Crypto Market Reacts to Fed’s Liquidity Signal
The Federal Reserve’s move to reduce quantitative tightening (QT) has created fresh optimism in the market. Slower QT means more money remains in the financial system, possibly leading to a broader inflow into risk assets like cryptocurrencies.
As a result, Bitcoin soared to $87,000, reflecting strong market confidence. Even though the central bank’s long-term stance remains cautious, short-term investor sentiment has shifted positively.
Market projections, based on LSEG data, still anticipate a 56-basis-point rate cut in 2025, despite the Fed signaling uncertainty. Notably, four Fed officials do not foresee any rate cuts next year, creating a mixed outlook for long-term policy direction.
Bitcoin Price Outlook: Bullish Momentum Builds
Despite interest rates remaining unchanged, Bitcoin bulls regained control, pushing BTC’s price upward. At the time of writing, Bitcoin is trading around $85,656, reflecting a 3.28% daily gain and a 2.6% increase over the past week.
According to Titan of Crypto, a well-known analyst, BTC is forming a bullish pattern — a descending broadening wedge — suggesting the possibility of a breakout that could propel Bitcoin beyond the $95,000 mark in the coming weeks.
FOMC Impact on Ethereum, XRP, and Altcoins
The FOMC decision also hadq a ripple effect on major altcoins like Ethereum (ETH) and XRP.
- Ethereum (ETH) surged by 5% to $2,020, with analysts predicting a potential9 rally to $4,000 under highly bullish conditions. On-chain metrics indicate a decline in ETH exchange reserves, a sign that large holders (whales) are accumulating ETH in cold wallets, hinting at long-term bullish sentiment.
- XRP, while experiencing lower derivatives activity, is seeing an increase in active wallet addresses. The price is projected to rise by up to 8%, with possible resistance at $2.56. The Relative Strength Index (RSI) trend also supports a potential upward breakout.
What’s Next for Bitcoin and Crypto Markets?
Investors are now closely monitoring the release of the FOMC meeting minutes and upcoming comments from Fed Chair Jerome Powell, which could provide more clarity on future monetary policy direction.
The Fed’s signal to reduce the pace of quantitative tightening — cutting the Treasury redemption cap from $25 billion to $5 billion per month — could be a game-changer for market liquidity.
If macroeconomic7 conditions remain favorable, the crypto rally may gain further momentum, with Bitcoin and altcoins poised for more upside.
Key Takeaways:
- Traders await FOMC minutes and Powell’s next speech.
- Fed holds interest rates at 4.25%-4.5%.
- Slower QT may increase liquidity — bullish for crypto.
- Bitcoin price hits $87,000, signaling strong market sentiment.
- Altcoins like Ethereum and XRP also show upward trends.
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