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- The Federal Reserve kept interest rates unchanged at 3.50%-3.75%, but three policymakers voted for a 25-point increase.
- The central bank said inflation remains above target as economic activity, productivity and investment continue to show strength.
- Bitcoin fell to $63,300, while Ethereum fell below $1,900 as traders looked again at the prospect of higher interest rates in the long term.
- Despite continued gains in Bitcoin ETFs, risk appetite eased following the Fed’s hawkish message.
Fed Keeps Rates But Inflation-Fighting Signs Aren’t Over
The Federal Open Market Committee voted 9-3 to leave the federal funds rate at 3.50%-3.75%, a decision that was in line with market expectations but had a more conservative message than many investors expected.
Three officials – Beth Hammack, Neel Kashkari and Lorie Logan – disagreed with a 25 basis point increase, reflecting continued concern that inflation is still above the Fed’s 2% target.
In his processThe central bank explained that the US economy is growing rapidly, supported by stable employment, strong productivity growth and continued business investment. Government officials have pointed to energy-related shocks as a factor in the rise in inflation and reiterated their commitment to restoring price stability.
Rather than signaling the end of tightening, the statement says policymakers will be ready to act if inflation continues to rise above expectations.
Bitcoin Tests Long-Term Support
Bitcoin traded around $63,270, extending losses after the Fed’s announcement as investors reduced exposure to risky assets.
On the four-hour chart, BTC has fallen below the 20-, 50- and 100-period moving averages, leaving the 200-period moving average around $63,200 as the most important technical support. A sustained move below this level could indicate a recent low near $62,800, while any recovery should resume resistance between $64,200 and $64,700, with multiple moving averages.
The broader cryptocurrency market also weakened, with the total market capitalization falling to about $2.17 trillion, while the Fear & Greed Index fell to 34, showing that investor sentiment has changed greatly to fear.
Ethereum Loses Power Under Privacy Resistance
Ethereum was also under pressure, trading near $1,882 after failing to hold above short-term resistance.
The stock remains below the 20-time and 50-time moving averages, while continuing to trade above the 100-time moving average at around $1,883, an area that is now working quickly. The 200-time moving average around $1,794 continues to define the long-term trend.
Momentum indicators have also softened. The Relative Strength Index (RSI) has dropped to around 45, staying below its signal line and pointing to a weak buying trend without entering oversold territory.
A recovery above $1,900-$1,915 would improve Ethereum’s short term technical support, while a break below $1,880 would create an opportunity for another test of lower support levels.
High Long-Term Outlook Keeps Crypto Markets Looking Economical
Although the Federal Reserve left its interest rate unchanged, policymakers made it clear that inflation remains above target and that further tightening has not been resolved. The combination of a divided vote, a growing economy and persistent price pressures strengthened expectations that interest rates would remain high for a long time.
For cryptocurrency markets, the outlook is now shifting to the upcoming inflation, employment and economic growth, which will create expectations before the next Fed meeting. High lending often reduces the amount of money available for high-risk assets, making capital outflows a key driver of sentiment in Bitcoin, Ethereum and the digital asset market. Until there is clear evidence that inflation is moving toward the Fed’s 2% target, investors should remain sensitive to economic data that could change the path of monetary policy.
This model is robust, avoids repeating the Fed’s pricing actions, and naturally connects the hawkish message to the next catalyst for crypto markets.
