Bitcoin rallied on Wednesday morning as crypto markets rose and the US dollar remained under pressure ahead of a closely watched Federal Reserve decision later today.
summary
- Bitcoin price is close to recovering the $90,000 support level.
- The Fed is widely expected to keep interest rates on hold at today’s meeting.
- Bitcoin price action has formed a bullish setup on the 4-hour chart.
According to data from crypto.news, Bitcoin ($BTC) has risen from Tuesday’s low of $87,315 and stabilized around $89,310 at press time.
Other large cryptocurrencies followed suit, including Ethereum (ETH). $BNB ($BNB), $XRP ($XRP), Solana (SOL) increased in the 1% to 3% range. This has pushed the overall cryptocurrency market up 1.3% in the past 24 hours, reaching $3.1 trillion at the time of writing. These cautious moves mean investors are waiting for clearer signals before re-engaging with the market.
Bitcoin prices have been on a downward trend since January 15th.
US President Donald Trump’s recent threat to impose tariffs on Canada, which is pursuing a free trade agreement with China, led to a weaker US dollar, which fell to its lowest level since early 2022.
This led to a strong rally in precious metals such as gold and silver, which hit new highs this week, but at the cost of capital turnover from the crypto market.
You may also like: Fundstrat’s Tom Lee sees a breakout in Bitcoin and Ethereum prices after the precious metals peak
According to the latest data from Santiment on X, social media conversations currently favor gold and silver over cryptocurrencies.
Against this backdrop, the top two dollar-pegged stablecoins, Tether (USDT) and USD Coin (USDC), fell to their lowest prices since November 20, the largest decline in the past 10 days.
Liquidity was flowing out of the crypto market at a time when the US-listed Spot Bitcoin Exchange Traded Fund was already witnessing steady outflows. The lack of buying demand ultimately caused Bitcoin to lose the $90,000 support level.
It’s clear that traders are cautious ahead of the Fed’s interest rate decision, scheduled for 2pm ET.
Many in the market expect the Fed to keep interest rates unchanged within its current target range of 3.50% to 3.75% at its latest policy meeting, as it assesses the impact of three rate cuts scheduled for the second half of 2025.
According to the CME FedWatch tool, there is a greater than 97% chance that policy will remain unchanged at today’s meeting.
The market had largely anticipated the Fed’s latest move, so the decision to keep interest rates on hold is likely to strengthen bullish sentiment on risk assets, including Bitcoin. Traders typically take a risk-on stance when the Fed signals a rate cut or leaves rates unchanged.
On the other hand, if the Fed signals a hawkish stance, crypto prices could fall as investors realize they are too optimistic, triggering a reset.
Bitcoin price analysis
On the 4-hour chart, Bitcoin price appears to be moving within an ascending parallel channel pattern, which suggests that the asset’s price will continue to rise as long as it remains within it.
Bitcoin price has formed an ascending channel pattern on the daily chart — January 28 | Source: crypto.news
Momentum indicators such as the MACD are pointing up after a bullish crossover, indicating that the rally still has enough momentum to continue before facing a pullback.
Meanwhile, the relative strength index has also formed a bullish divergence, which could be taken as another buy signal.
Therefore, Bitcoin price is likely to regain support at $90,000 in the near term, perhaps ahead of today’s FOMC meeting.
A decisive breakout from this channel, which also marks the 50-day SMA, could trigger more aggressive buy positioning $BTC For further profit.
read more: Tonight’s Jerome Powell speech: What to expect and where to pay attention
Disclosure: This article does not represent investment advice. The content and materials published on this page are for educational purposes only.
