Bitcoin Price Struggles After Federal Reserve Holds Interest Rates

Bitcoin’s recovery lost momentum after the Federal Open Market Committee (FOMC) confirmed that the US Federal Reserve would keep its benchmark interest rate unchanged at 3.5% to 3.75%. Following the announcement, BTC extended its two-day decline, briefly dropping below the $75,000 level as markets reacted to the Fed’s cautious tone.

Fed Cites Middle East Uncertainty and Inflation Concerns

In its latest minutes, the Federal Reserve emphasized ongoing uncertainty tied to developments in the Middle East, particularly the war in Iran, alongside persistent inflation pressures. Policymakers reiterated their dual mandate of maximum employment and 2% inflation but stressed the need to remain flexible as risks evolve. Although the decision to hold rates aligned with expectations, the broader message signaled caution.

Post-FOMC Reaction Triggers Volatility in Bitcoin

Market participants described Bitcoin’s decline as a typical “sell-the-news” reaction. According to Shubh Varma, the asset quickly rebounded to pre-announcement levels, indicating underlying demand. Supporting this view, the global bid-ask ratio surged to 0.3—one of the highest readings—while open interest declined during the drop, suggesting position unwinding and stop-loss activity rather than strong bearish conviction.

Technical Levels Signal Risk of Momentum Loss

After the FOMC release, Bitcoin touched an intraday low of $74,93. Traders had been watching the $76,500 to $75,500 range as a key support zone following a breakout above a descending channel. While this retest occurred, failure to reclaim the moving average could turn former support into resistance and weaken the broader bullish structure.

Bearish Positioning and Weak Demand Limit Upside

On-chain data from Glassnode highlighted increasing bearish leverage ahead of the Fed meeting, with rising open interest and divergence between spot and futures market activity. Analysts noted that Bitcoin remains below its “true market mean” near $79,000, while profit-taking by short-term holders and a shift toward net short futures positions have reduced upward momentum.

Institutional Demand Supports Key Price Range

Despite short-term pressure, institutional inflows into spot Bitcoin ETFs and increasing activity on CME futures have helped establish a strong accumulation zone between $65,000 and $70,000. This range is now viewed as a critical support area, even as weak demand continues to cap sustained rallies in the near term.