What Bitcoin, Ethereum Traders Should Watch Ahead of Fed Rate Decision

The Federal Reserve is almost certain to cut interest rates on Wednesday, with a 97.8% chance of a 25-basis point cut. However, the implications for the crypto markets remain unclear. Analysts suggest that ending quantitative tightening (QT) could provide a boost for Bitcoin, implying a greater acceptance of inflation. Bitcoin is trading around $115,000, reflecting expectations that the rate cut has already been priced in. Histories indicate that looser monetary policies typically favor crypto assets. Notably, experts believe that the Fed may soon conclude QT, which could signal a rise in inflation tolerance close to 3% in the medium term. This outlook contributes to a positive sentiment for risk assets, including cryptocurrencies, potentially extending the current bull market well into 2026. Trader positioning ahead of the Fed meeting emphasizes critical risk management, particularly in the $111,000 to $115,000 range for Bitcoin, which could define the market's next steps, regardless of whether the Fed’s announcements align with expectations.

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