Tonight’s Fed interest rate decision—three possible scenarios for how it may affect BTC
1. Most likely: A 25-basis-point rate hike. At the same time, the Fed will signal that this is a defensive, one-off hike and does not pre-commit to further hikes. The outlook will depend on future inflation data.
In other words: the hike happens while the tone turns dovish—bearish pressure on BTC is effectively “priced in,” shorts cover, and the market sees a short-term rebound. But the rebound may be limited. Whether BTC continues to rise or consolidates later depends on factors such as ETF fund flows and changes in U.S. Treasury yields.
2. Lower probability: A 25-basis-point hike, while the Fed adopts a hawkish stance. In this scenario, Powell indicates there may still be further hikes within the year—this is only the beginning, and interest rates need to stay at a high level for longer.
This is the worst case: it not only hurts sentiment but also exceeds market expectations. BTC continues to fall, long positions get liquidated in a chain reaction, and the negative impact will likely persist for a while.
3. Extremely low probability: No rate hike. The Fed holds its ground under pressure. There are signs that inflation is easing, but it does not guarantee that the Fed will not hike later.
No hike but a hawkish tone: BTC could surge sharply, and the market may interpret “policy facts” as more important.
Currently, most people predict that scenario 1 has the highest probability. If that’s the case, today’s market action is likely to remain a slow, downward drift. After the announcement, once shorts lock in profits and cover, there may be a rebound. The safest approach is not to open any positions—wait for the result, then look for opportunities.
1. Most likely: A 25-basis-point rate hike. At the same time, the Fed will signal that this is a defensive, one-off hike and does not pre-commit to further hikes. The outlook will depend on future inflation data.
In other words: the hike happens while the tone turns dovish—bearish pressure on BTC is effectively “priced in,” shorts cover, and the market sees a short-term rebound. But the rebound may be limited. Whether BTC continues to rise or consolidates later depends on factors such as ETF fund flows and changes in U.S. Treasury yields.
2. Lower probability: A 25-basis-point hike, while the Fed adopts a hawkish stance. In this scenario, Powell indicates there may still be further hikes within the year—this is only the beginning, and interest rates need to stay at a high level for longer.
This is the worst case: it not only hurts sentiment but also exceeds market expectations. BTC continues to fall, long positions get liquidated in a chain reaction, and the negative impact will likely persist for a while.
3. Extremely low probability: No rate hike. The Fed holds its ground under pressure. There are signs that inflation is easing, but it does not guarantee that the Fed will not hike later.
No hike but a hawkish tone: BTC could surge sharply, and the market may interpret “policy facts” as more important.
Currently, most people predict that scenario 1 has the highest probability. If that’s the case, today’s market action is likely to remain a slow, downward drift. After the announcement, once shorts lock in profits and cover, there may be a rebound. The safest approach is not to open any positions—wait for the result, then look for opportunities.
