Bitcoin tested resistance at $90,000 on Wednesday as traders braced for heightened volatility ahead of the US interest rate decision.
Key takeaways:
- Traders are fully pricing in no change to US interest rates today, with odds at 100%.
- A break below the $80,000–$84,000 support range could send Bitcoin down toward $65,500.
Markets are pricing in a near-100% probability that interest rates will remain unchanged at 3.5%–3.75%, according to Polymarket data.
Futures market traders have priced in a 97.2% probability that the Fed will keep interest rates unchanged, with just a 2.8% chance of a 25-basis-point cut. Analysts say any bearish reaction to steady rates is likely already priced in.
Traders still face other sources of volatility, including developments in the Japanese economy, the risk of another US government shutdown, the Fed’s yen-buying operations, and Fed Chair Jerome Powell’s post-FOMC remarks. As a result, markets will be closely watching Powell’s tone at the news conference for any indication of a shift.
“Tomorrow is FOMC, and markets are certain the Fed will leave rates unchanged,” analyst Satoshi Stacker wrote on X on Tuesday, adding:
“All eyes will be on Powell’s press conference and what he suggests the Fed’s plans are for the coming months.”
“If we get any hints of rate cuts in March, Bitcoin could skyrocket,” said crypto investor Kiran Gadakh.
Meanwhile, the US Dollar Index fell to a four-year low of 95.55 on Tuesday, its lowest level since February 2022.
Historically, a weak US dollar during periods of macroeconomic and geopolitical uncertainty can limit the liquidity that risk assets like Bitcoin need to rally.
As Cointelegraph previously reported, the BTC/USD pair has often seen significant breakouts in the months following a drop in the US Dollar Index (DXY) below the 96 level.
Analysts highlight key BTC price levels
Traders say Bitcoin bulls need to hold the $80,000–$84,000 support zone to avoid a deeper correction, with bear-market targets potentially reaching as low as $58,000. The $84,000 level remains particularly critical, representing the 0.382 Fibonacci retracement measured from the 2022 bear-market low at $15,500 to recent local highs, according to Daan Crypto Trades.
Daan Crypto Trades noted that the 0.382 Fibonacci retest has consistently held throughout the current market cycle. “While price previously reacted more quickly, this is no longer the case,” the analyst added.
“While this is technically still a decent level to watch, I’d want to see some action pretty soon to keep the structure alive.”
“Bitcoin cannot drop below $81K under any circumstances,” said Alphractal founder and CEO Joao Wedson in a post on X Tuesday.
Wedson warned that breaking this level could trigger “a capitulation process similar to 2022,” adding:
“The next major support would sit around $65,500.”
On the upside, traders are watching the $90,000–$94,000 range, where the 50-day and 100-day moving averages converge.
Above that, Bitcoin could aim for a retest of the $98,000 psychological level, which also aligns with the short-term holder cost basis.
