Bitcoin Facing FOMC Storm: Hope or Trap?
The Federal Open Market Committee (FOMC) monetary policy meeting is becoming the focus of global attention, especially in the crypto community. As many investors expect the Fed to cut interest rates by 0.25%, Bitcoin is once again at the center of the debate: Is this a catalyst for a breakout, or just a familiar “bull trap” of the market?
-Optimism on the rise
According to data from Santiment, social media conversations about Bitcoin are filled with green, with over 60% of retail investors expressing optimism. This is the highest level of excitement in the past two months, indicating high expectations for Bitcoin to break out of its prolonged sideways state.
However, history is not on the side of the crowd. The cryptocurrency market has repeatedly witnessed the situation of "buying the rumor, selling the truth", when prices corrected sharply right after seemingly favorable policy decisions.
-The Fed scenario and the impact on Bitcoin
If the Fed cuts interest rates as expected: This will be a signal to support risky assets, from stocks to crypto. Bitcoin may benefit in the short term, but the overheated rally can easily lead to profit-taking pressure.
If the Fed keeps interest rates unchanged: The market may react negatively. This surprise will trigger strong fluctuations, causing Bitcoin and altcoins to easily plummet as money flows to safe assets.
-More pressure on the US economy
Notably, the US economic picture still shows many cracks. The latest jobs report recorded the deepest decline in the temporary labor group since the pandemic, raising concerns that the Fed will find it difficult to maintain tightening policy for too long. This could prompt the central bank to pivot soon, even though inflation is not yet fully under control.
-Bitcoin – where expectations and risks converge
In the context of persistent inflation, weakening jobs and monetary policy at a crossroads, Bitcoin is considered a measure of “market sentiment”. Investors should note: the current euphoria could quickly turn to disappointment if the Fed makes a surprise decision.
➡️ For Bitcoin, this FOMC meeting is not just about interest rates. It is a test of investors’ confidence in the role of crypto as a hedge against economic uncertainty.