Bitcoin Rebounds 11% Ahead of FOMC Meeting

Bitcoin (BTC) experienced a significant rebound this week, climbing from a low of $76,000 to $84,000 ahead of the Federal Open Market Committee (FOMC) meeting scheduled for March 19. This recovery comes as a relief to investors who have been navigating through macroeconomic uncertainties and market volatility. The FOMC meeting is a critical event for the crypto market, as the U.S. Federal Reserve's decision on interest rates could influence market sentiment and the trajectory of Bitcoin's price.

The market is widely expecting the Fed to maintain current interest rates, with a high probability of keeping the rate at 4.25% to 4.5%. This expectation is based on recent data indicating a cooling inflation rate, which suggests that the central bank is aiming to balance inflation and economic growth without adopting a hawkish or dovish stance. Historically, a Fed rate cut has been bullish for Bitcoin, as it boosts investor confidence to allocate more capital to the flagship cryptocurrency. Despite the unlikelihood of a rate cut at the next FOMC meeting, Bitcoin is currently rebounding and aiming to reclaim the psychological $90,000 price level.

The upcoming FOMC meeting and the subsequent press conference by Fed Chair Jerome Powell are crucial for the crypto market. A dovish hint from Powell could be bullish for risk assets, while a hawkish stance could trigger a bearish reaction. The current market sentiment is neutral with a bullish bias, as the U.S. sustains cooled-down inflation, which could pave the way for future rate cuts. However, the Fed may delay its decision-making to assess the impact of new tariffs on global markets, which have caused turmoil across various sectors.

In recent days, Bitcoin hit a multi-month low of $76,000, but the cooling inflation and unchanged interest rate speculations have shown potential for recovery despite macroeconomic heat. The crypto market's reaction to the FOMC meeting will be closely monitored, as rate cuts have historically propelled a bullish wave in the crypto market, benefiting Bitcoin, Ether, and other altcoins. The market's volatility and the potential for a paradigm shift in sentiment make the upcoming FOMC meeting a pivotal event for the crypto market.

In addition to the FOMC meeting, several other developments have kept investors optimistic despite price turbulence. Global financial services firm Cantor Fitzgerald launched a $2 billion Bitcoin financing business, partnering with Anchorage Digital and Copper for secure institutional access. Cathie Wood’s ark Invest also expanded its Bitcoin holdings, accumulating 997 BTC worth $80 million via coinbase this week. Despite the recent market turmoil, 95% of investors in the U.S. spot Bitcoin ETFs continue to hold onto their holdings, indicating long-term optimism over Bitcoin's price prospects.

Furthermore, the Singapore Exchange is planning to launch Bitcoin futures contracts shortly ahead, and Deutsche Boerse’s post-trade unit Clearstream plans to launch Bitcoin & Ethereum custody services by the end of this year. These developments suggest that institutional interest in Bitcoin remains strong, which could support the cryptocurrency's price in the long run. The global cryptocurrency market cap is again embarking on a trajectory towards the $3 trillion mark as the week comes to an end, reflecting the overall optimism in the market.