Bitcoin has reached $98,000 after the Fed decided to keep interest rates steady. Fed chair Jerome Powell cited risks of higher unemployment and inflation as reasons for maintaining rates. Despite pressures from President Trump, the economy is viewed as stable. The Crypto Fear & Greed Index has been rallying, reflecting increasing investor confidence, though concerns about future rate cuts impacting Bitcoin linger.
Bitcoin has marked a significant bounce back, hitting $98,000 for the first time in almost three months. This uptick comes on the heels of the US Federal Reserve’s decision to keep interest rates steady for at least another month. Notably, this announcement appears to counter pressures from President Donald Trump, who had been vocal about his discontent with the current rate policies, even suggesting he might dismiss Fed chair Jerome Powell for being slow on rate cuts.
During a recent statement, Powell highlighted that the Federal Reserve’s rate-setting committee is maintaining rates between 4.25% and 4.50%. He pointed to rising risks of higher unemployment and inflation as key reasons for the decision. Although inflation numbers have improved, Powell mentioned they still exceed the Fed’s longer-term target of 2%. He noted a marked decline in sentiment among both businesses and consumers, largely attributed to uncertainties surrounding Trump’s trade policies.
Despite these uncertainties, Powell reassured that the economy remains in a robust position. As the Fed approached its decision, analysts relied on data from CME Group’s FedWatch Tool, indicating little expectation for an immediate rate cut. Powell also pointed out that the existing unemployment rate is relatively low and that the labour market is “at or near maximum employment.” The market anticipates a drop in the Fed funds rate to about 3.6% by the end of 2025.
Interestingly, Bitcoin’s initial reaction to Powell’s comments saw it dip briefly to $95,866, but it quickly rebounded to touch the $98,000 mark shortly afterwards—its highest level since February 21. This surge in Bitcoin can be linked to growing momentum in the cryptocurrency space; the Crypto Fear & Greed Index has swung back into “Greed” territory, and Bitcoin exchange-traded funds (ETFs) have seen inflows near $4.41 billion since late March.
However, concerns linger. On March 9, financial analyst Timothy Peterson issued a warning that if the Fed postpones rate cuts through 2025, the resulting market downturn could see Bitcoin prices decline to around $70,000. This came after Powell had previously stated that there is no urgency for the Fed to make immediate rate adjustments, indicating they’re in a solid position to wait for more clarity in the coming months.
To be clear, this article does not provide any direct investment advice. Investing and trading come with inherent risks, so readers are strongly encouraged to carry out their own due diligence before making financial decisions.
