The cryptocurrency market is in anticipation as Bitcoin nears the edge of a potential rebound. Analysts hint at a potential price move toward $90,000. It is expected that this move will be fuelled by shifting economic winds and pivotal Federal Reserve decisions. With inflation anxieties cooling, investors await clarity and opportunity amid a volatile landscape.
Fed’s Policy
Bitcoin’s recent slump, marked by a two-month downtrend, has rattled believers in its four-year bullish cycle. Yet easing U.S. inflation fears now offer hope. Markus Thielen, CEO of 10x Research, notes Bitcoin’s oversold status could trigger a rally if the Fed adopts a “mildly dovish” stance.
Federal Reserve Chair Jerome Powell’s recent remarks amplified this optimism. He downplayed long-term inflation risks from tariffs, recalling 2019’s temporary spikes that led to rate cuts. Investors have interpreted this as a sign the Fed may pause aggressive monetary tightening, potentially reviving risky assets like Bitcoin.
FOMC Meeting
All eyes locked on Wednesday’s Federal Open Market Committee (FOMC) meeting for hints about 2025’s monetary policy. Analysts argue the Fed’s stance on quantitative tightening (QT), a program reducing liquidity, could reshape Bitcoin’s path. Iliya Kalchev of Nexo highlights ending QT might “boost liquidity and risk appetite,” propelling BTC upward.
Markets overwhelmingly expect rates to hold steady, per CME Group’s FedWatch Tool. However, Bank of America reports investors slashed U.S. equity exposure by 40% since February, signalling recession fears. Bitcoin’s fate now hinges on balancing Fed optimism against broader economic doubts.
Bitcoin Rally Post-Fed Decision
Following the Fed’s decision to maintain rates at 4.25%–4.50 Bitcoin surged 4.5%, reclaiming $85,500. its highest price level since March 9. Major altcoins joined the rally, including XRP which jumped 10% after the SEC dropped its Ripple lawsuit, while Ether and Solana climbed 7%.
Crypto-linked stocks also rebounded. Bitdeer and Core Scientific rose 10% and 8%, respectively, though both remain down sharply year-to-date. Meanwhile, gold’s record-breaking rally past $3,050 per ounce underscores a broader flight to safe havens, complicating Bitcoin’s narrative as “digital gold.”
Gold’s Rise Shadows Crypto Gains
Gold’s unprecedented rally highlights lingering economic uncertainty. Callie Cox of Ritholtz Wealth Management warns the Fed’s potential rate cuts may come “at the cost of battering stocks,” suggesting a fragile economic outlook. This duality of bullish crypto moves versus gold’s safe-haven demand reflects divided investor sentiment.
Mohamed El-Erian, chief economist at Allianz, criticised Powell’s revived use of “transitory” to describe tariff impacts. “It’s too early to dismiss inflationary risks,” he argued on X, urging humility from policymakers. Such skepticism tempers enthusiasm, reminding markets that macro risks persist.
Analysts Urge Caution Despite Rally
While Bitcoin’s rebound excites, experts warn against unchecked optimism. Kalchev notes, “persistent inflation or tight financial conditions could limit upside.” Thielen adds BTC may enter a “broader consolidation range,” with $90,000 as a near-term target rather than a sustained peak.
Moreover, recession fears linger. U.S. equity sell-offs and erratic Treasury yields signal shaky confidence. Bitcoin’s correlation with tech stocks evident in Nasdaq’s parallel 1% rise further ties its fate to traditional markets, challenging its decoupling narrative.
Navigating a High-Stakes Economic Crossroads
Bitcoin’s path to $90,000 remains fraught with “ifs.” Fed policy, inflation data, and global risk appetite will dictate its trajectory. While dovish signals ignite short-term rallies, long-term stability demands clearer economic footing.
For now, crypto markets mirror a world in flux, celebrating cautious Fed optimism while eyeing gold’s meteoric rise. As Powell’s “transitory” debate rages, Bitcoin investors straddle hope and realism, navigating a landscape where every percentage point tells a story.
Written By Fazal Ul Vahab C H
