Introduction
The global financial markets are keenly focused on the announcements from the United States Federal Reserve (FED) regarding interest rates, following the Federal Open Market Committee (FOMC) meeting on January 28. In this context, Bitcoin (BTC) is awaiting clear signals about the direction of US monetary policy, a decisive factor for its short-term price.
Market Expectations and Interest Rates
The market appears to be discounting any changes in the interest rate. The futures market reflects an almost zero probability of a rate cut, according to the FedWatch indicator from the CME Group. This tool estimates a 97.2% probability that the FED will keep the reference rate unchanged, within the range of 3.5% to 3.75%. This projection aligns with prediction markets like Polymarket, where the option of monetary stability reaches a 99% probability.
The Federal Reserve’s possible caution responds to mixed indicators in the economy. The unemployment rate showed a slight drop in December, after having increased for much of the previous year, suggesting a possible stabilization of the labor market. However, uncertainty persists about the schedule of adjustments for the rest of the year, following the last rate cut on December 10.
Impact of Powell’s Speech
Expectations are high for the speech following the interest rate announcement. Beyond the percentage figure of the rates, the market will closely follow the post-announcement press conference led by Powell. His statements could offer key clues about the future of monetary policy and generate significant movements in both Bitcoin and traditional markets.
There are two main scenarios for the price of Bitcoin. In the first, if Powell reinforces a restrictive speech, warns of persistent inflation, and dismisses the urgency to lower rates, the likely impact would be a new correction of BTC, with a greater flow towards lower-risk assets. In the second scenario, if the FED president adopts a more flexible tone and leaves open the possibility of future cuts, the market could interpret the message as a more accommodative turn. In this case, the FED announcement could trigger quick rebounds or significant rises in the price of Bitcoin.
Current State and Scenarios for Bitcoin
From a technical point of view, BTC remains highly sensitive to macroeconomic events. Currently, the price is below $90,000, with a 5% drop in the last seven days. The coin continues in a corrective phase from the all-time high of $126,000 reached in October.
If the FED keeps rates unchanged for an extended period, Bitcoin could stabilize at current levels. The absence of clear signals of monetary easing tends to reduce speculative appeal in the short term, favoring scenarios of consolidation or sideways movements.
On the other hand, a more lax monetary policy, reflected in the FED announcement, could reactivate the appetite for risk. Historically, Bitcoin and other digital assets tend to react positively to expectations of greater liquidity and a weaker dollar, an environment that would favor the recovery of BTC’s bullish momentum.
Conclusion
In conclusion, the upcoming FED announcement and subsequent speech by Powell will be critical in determining the short-term direction of Bitcoin. Whether the FED maintains its current interest rate or signals a more flexible monetary policy, the impact on Bitcoin and other digital assets will be significant. As always, investors and traders should keep a close eye on these developments and adjust their strategies accordingly.
