Bitcoin Awaits Fed Meeting: Rate Decision Could Shake the Market

Over the past few days, BTC has remained in a tight range between $81,000 and $85,000, showing relatively low volatility. Analysts attribute this to reduced risk appetite among traders ahead of Friday’s Fed decision and remarks from Chairman Jerome Powell, which will shape the future of U.S. economic policy.

While most expect the Fed to keep rates unchanged, the focus will be on its forward guidance and economic outlook.

Meanwhile, the Fear & Greed Index remains low at 23, signaling a cautious market sentiment. Similarly, the Altcoin Season Index sits at 21, confirming a Bitcoin-dominated market cycle.

This trend is further reinforced by Bitcoin’s dominance, which has surpassed 60.7%, while Ethereum (ETH) continues its months-long decline.

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Meanwhile, institutional investors are steadily returning to Bitcoin via U.S. spot ETFs. According to CoinGlass, net inflows have reached approximately $365 million since the start of the week. The iShares Bitcoin Trust ETF (IBIT) by BlackRock led the pack, attracting $260.4 million in capital.

March 18, 2025, marked a unique trading day, as only IBIT and ARKB recorded capital flows, while all other Bitcoin ETFs saw no activity.

Global Liquidity Remains Weak

Some crypto analysts view the current situation as a typical market correction, while others point to broader liquidity challenges affecting not just crypto but the global economy as a whole. For example, Ben Simpson, CEO of Collective Shift, believes the bull cycle is still intact but is being delayed by macroeconomic factors restricting liquidity.

It is only the third or fourth correction we’ve had over 25% we’ve had in Bitcoin this cycle compared to 12 last cycle. Things got overheated, and they needed to cool down, and the market needed to find a new foundation, and now we’re waiting for the next new narrative,

Simpson explained.

Charles Edwards, founder of Capriole Investments, shares a similar view. He explains that Bitcoin is currently facing a flat U.S. monetary cycle, where high interest rates are limiting market liquidity. However, he also pointed out that after four years of tightening, rates may have bottomed out, which could serve as a bullish catalyst for BTC in the long run.

Despite the ongoing correction, expectations for a Bitcoin rebound are gaining momentum, with the potential to retest its previous all-time high (ATH). If the Fed’s rate decision and Jerome Powell’s remarks turn out to be favorable, volatility is likely to increase, potentially sparking a new rally across the crypto market.

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