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- The Fed kept interest rates unchanged at 3.50%-3.75%, but three policymakers voted for a 25 basis point increase.
- The central bank said inflation remains above target while economic activity, productivity and investment continue to show strength.
- Bitcoin fell toward $63,300, while Ethereum fell below $1,900 as traders reassessed the potential for higher interest rates in the long term.
- Despite continued institutional inflows into spot Bitcoin ETFs, risk appetite has weakened following the Fed’s hawkish message.
The Fed is holding interest rates steady but signaling that the inflation battle is far from over
The Federal Open Market Committee voted 9-3 to keep the target range for federal funds at 3.50%-3.75%, a decision that is consistent with market expectations but carries a tougher political message than many investors expected.
Three officials — Beth Hammack, Neel Kashkari and Lori Logan — objected in favor of a 25 basis point increase, highlighting persistent concerns that inflation remains above the Fed’s 2% target.
In its policy statementThe central bank described the US economy as expanding at a strong pace, supported by resilient hiring, strong productivity growth and continued business investment. Officials also pointed to energy-related supply shocks as a factor keeping inflation high and stressed their commitment to restoring price stability.
Rather than signaling that the tightening cycle is over, the statement noted that policymakers remain prepared to act if inflation proves more persistent than expected.
Bitcoin is testing long-term support
Bitcoin traded at around $63,270, extending losses following the Fed’s announcement as investors reduced their exposure to risky assets.
On the four-hour chart, Bitcoin fell below its 20, 50 and 100 period moving averages, leaving the 200 period moving average near $63,200 as the most important technical support. A sustained move below this level could expose the recent swing low around $62,800, while any recovery would first need to reclaim resistance between $64,200 and $64,700, where several moving averages are currently converging.
The broader cryptocurrency market also weakened, with the total market capitalization falling to approximately $2.17 trillion, while the Fear and Greed Index fell to 34, indicating that investor sentiment has shifted more to fear.
Ethereum is losing momentum below major resistance
Ethereum was also under pressure, trading near $1,882 after failing to hold above short-term resistance.
The asset remains below its 20-period and 50-period moving averages, while it continues to trade above the 100-period moving average near $1,883, an area that is now acting as immediate support. The 200-period moving average around $1,794 continues to define the broader medium-term trend.
Momentum indicators also declined. The Relative Strength Index (RSI) has fallen to around 45, remaining below the signal line and indicating weak buying momentum without entering the oversold zone yet.
A recovery above $1,900-$1,915 would improve Ethereum’s short-term technical outlook, while a break below $1,880 could increase the likelihood of another test of lower support levels.
Higher long-term expectations keep cryptocurrency markets focused on economic data
Although the Fed left its benchmark interest rate unchanged, policymakers made clear that inflation remains above target and additional tightening has not been ruled out. The combination of split voting, resilient economic growth and persistent price pressures has fueled expectations that interest rates may remain high for longer.
For cryptocurrency markets, the focus now turns to incoming inflation, employment, and economic growth data, which will shape expectations ahead of the next Fed meeting. Higher borrowing costs typically reduce liquidity available for riskier assets, making macroeconomic releases a key driver of sentiment across Bitcoin, Ethereum, and the broader digital asset market. Until there is more clear evidence that inflation is moving sustainably toward the Fed’s 2% target, investors are likely to remain sensitive to economic data that could change the course of monetary policy.
This version is more hawkish, avoids repeating that the Fed held interest rates, and naturally links the hawkish message to the next catalyst for cryptocurrency markets.
