Bitcoin traders are concentrating on the upcoming Federal Reserve (Fed) decision and the dot plot chart that may indicate future rate changes. Currently, Bitcoin is trading within a tight range.
Focus on the Dot Plot
The Fed is widely expected to keep interest rates unchanged in the 4.25%–4.50% range. The final decision will be announced Wednesday at 2 PM EDT, followed by a press conference from Jerome Powell.
However, this decision is mostly priced in. The real action lies in the dot plot, which shows where each policymaker sees interest rates heading in the coming months and years. If the dot plot indicates fewer rate cuts than expected, it could strengthen the dollar and put downward pressure on Bitcoin and other risk assets.
Why Bitcoin Traders Care
Bitcoin’s price has already cooled after reaching highs above $100,000, and a hawkish Fed view could deepen that consolidation. Traders are bracing for volatility if the dot plot reflects less dovish expectations.
Analyst Matteo Greco from Fineqia mentioned that rate cut expectations for 2025 have been slashed from 100 basis points to only 50 and could dip further to 25 basis points if global tensions continue.
Long-Term Bitcoin Outlook
Interestingly, a more aggressive Fed stance not only weighs on crypto in the short term but also provides long-term potential. Higher rates increase U.S. debt servicing costs, worsening the fiscal outlook. This dynamic could enhance Bitcoin’s role as a hedge alongside gold, particularly as inflation and global uncertainty remain in focus.
For now, patience is key. Until the dot plot and Powell's comments are revealed, crypto markets are likely to remain cautious, watching for any shifts that could influence Bitcoin's next move.
Despite short-term volatility, analysts highlight that Bitcoin could rise by 120% in 2025 based on typical growth patterns. This indicates potential for strong upside ahead, regardless of immediate fluctuations.
