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The FOMC meeting of the US Federal Reserve has begun, with expectations that interest rates will remain at 4.25% to 4.50%. However, Jerome Powell's speech will be the decisive factor for Bitcoin and the cryptocurrency market. Currently, there is a 99% chance that the Fed will not adjust interest rates.
During this tense period, Bitcoin is trading between $92,000 and $97,000. Investors are waiting to see how Powell will guide the direction of inflation, growth, and the possibility of interest rate cuts, which will determine whether the cryptocurrency market continues to rise or fall.
Tensions escalate as Donald Trump proposes increasing taxes, raising concerns about inflation and delayed growth prospects. This is a stagflation scenario: slow growth but high inflation. In this context, the Fed faces a difficult choice between maintaining interest rates with the risk of further slowing the economy, or beginning to cut rates but potentially reigniting inflation.
Powell publicly maintains a hawkish attitude, but the Fed's recent actions suggest the opposite. The slowdown in quantitative tightening, the discreet repurchase of bonds, and the slower reduction of the balance sheet are signs that the Fed may be preparing for easing, even if not yet officially announced.
For Bitcoin, this expectation is enough to potentially trigger a price increase. If Powell appears moderate, there is a high likelihood that the price will exceed $97,000. Conversely, if he maintains a hard stance, investors may retest the $92,000 support level. The cryptocurrency market is highly focused on today's FOMC meeting, and Powell's attitude could set the trend for the rest of the second quarter.
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