Many people only focus on the 25 bps figure, but in my view, what matters more is how money flows will react after the Fed’s decision.
Bitcoin doesn’t fall just because interest rates rise. The issue is that money becomes more expensive, liquidity is tightened, and risk appetite changes.
3 Main Channels Impacting BTC
1. Capital Flows Leave Risky Assets
When bond yields and other safe assets become more attractive, some capital flows may withdraw from highly volatile assets like Bitcoin. Investors will reconsider the level of risk they’re willing to accept.
2. Leverage Becomes a Burden
The crypto market depends heavily on margin and futures. When the cost of capital rises, leveraged positions become more expensive. If prices fall, position cuts and liquidations can create even more selling pressure.
3. The US Dollar Exerts Pressure on BTC
Bitcoin is often priced in USD. If the greenback strengthens, the relative appeal of risky assets may weaken. However, the DXY doesn’t always rise along with interest rates, and BTC is still affected by many other factors.
What I’m Observing
I don’t want to jump to the conclusion that the Fed raising rates necessarily means BTC will drop sharply.
What matters is the market’s actual reaction:
Can BTC hold the key support zone?
Is the spot Bitcoin ETF cash flow flowing in or out?
Is leverage in the market being unwound?
How do the DXY and US bond yields respond?
Is the price confirming a break of structure, or is it just a short-term shakeout?
High interest rates can put pressure on Bitcoin in the short term, but they don’t automatically disprove the long-term accumulation story. I prefer to watch flows and price structure rather than FOMO based on a single red candle. No all-in. No revenge trading. Wait for confirmation before entering a trade, and always protect capital.