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Bitcoin (BTC) reclaimed the $85,000 threshold following the Federal Open Market Committee (FOMC) median forecast of 50 basis-point cuts in interest rates in 2025.
In addition to signaling potential rate cuts, the Federal Reserve announced plans to slow the pace of its balance sheet runoff, also known as quantitative tightening (QT), beginning April 1.
The monthly cap on Treasuries maturing without replacement will be reduced to $5 billion, down from the previous $25 billion limit. The announcement caused global markets across the board to surge, including crypto.
Bitcoin jumped from $84,235.71 to nearly $86,000 before settling at $85,363 as of press time, based on CryptoSlate data.
Despite Bitcoin’s nearly 2% price increase, not all major altcoins did not react as strongly. Ethereum (ETH) is priced at $2,039.11 after a 0.6% positive variation in the same period, and Cardano (ADA) secured a slight 0.5% growth.
Meanwhile, XRP and BNB showed virtually no price variation. However, Solana (SOL) crossed the $130 threshold and was trading at $133.55 as of press time.
Federal Reserve Chair Jerome Powell emphasized that the decision should not be interpreted as a broader policy shift but rather as a technical adjustment to ensure smooth market functioning.
Fed’s rate path
The updated projections reveal a more cautious stance among FOMC members regarding the pace and extent of rate cuts. The median forecast brings the interest rate to approximately 3.9% by year-end.
Nine policymakers anticipate two cuts in 2025, down from 10 in December, while eight now expect only one or no cuts, an increase from four in the previous forecast.
Meanwhile, two members foresee three cuts, a drop from five in December, and none project more than three rate reductions.
Longer-term expectations remain largely unchanged. The median forecast for the federal funds rate at the end of 2026 is 3.4%, while the 2027 projection is 3.1%. The Fed’s longer-run estimate of the neutral interest rate remains steady at 3%.
Moreover, the Fed’s latest economic forecasts indicate slow economic growth. The median 2025 GDP projection was revised downward to 1.7% from 2.1% in December.
The unemployment rate forecast for 2025 has increased slightly to 4.4% from 4.3%, signaling expectations of modest labor market softening.
The central bank also adjusted inflation projections upward, expecting the Personal Consumption Expenditures (PCE) inflation rate to reach 2.7% in 2025, up from the previous 2.5% estimate. Core PCE inflation, which excludes food and energy, is projected to rise to 2.8%, compared to the earlier forecast of 2.5%.
Impact of tariffs
During his post-meeting press conference, Powell addressed concerns over inflationary pressures, particularly the impact of tariffs.
He noted that a significant portion of recent inflation upticks could be attributed to tariff-related factors but stated that their long-term impact remains uncertain.
Powell also described tariff-driven inflation as “transitory” but acknowledged the difficulty of assessing its effects. He reiterated that the Fed monitors economic data for any signs of weakness but emphasized that policymakers are not hurrying to cut rates.
With persistent inflationary pressures and slowing economic growth, the Fed’s latest projections indicate a more measured approach to monetary policy adjustments.
The central bank’s willingness to slow quantitative tightening while maintaining a cautious stance on rate cuts reflects a balancing act between sustaining economic stability and controlling inflation.
Bitcoin Market Data
At the time of press 9:12 pm UTC on Mar. 19, 2025, Bitcoin is ranked #1 by market cap and the price is up 4.21% over the past 24 hours. Bitcoin has a market capitalization of $1.7 trillion with a 24-hour trading volume of $32.82 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 9:12 pm UTC on Mar. 19, 2025, the total crypto market is valued at at $2.8 trillion with a 24-hour volume of $97.98 billion. Bitcoin dominance is currently at 60.67%. Learn more about the crypto market ›
Mentioned in this article
Fed chair Jerome Powell and the rest of the committee are convinced of slower economic growth in the coming quarters amid softening labor market conditions.
For the second consecutive meeting, the United States Federal Reserve Committee chose to hold its prior interest rate hikes at between 5.25 and 5.50 percent during Wednesday’s largely anticipated FOMC statement. The Fed Chair Jerome Powell highlighted in a press release that the committee is still in discussions about whether federal funds rates need to be hiked further to contain the high inflation. Moreover, the fast-changing global economic outlook, which is fueled by the ongoing war in Ukraine, the Middle East crisis in Israel, and the notable growth of the BRICS alliance, has pushed the Fed to further tighten its monetary policies.
“The bigger picture is we are making progress on labor market, inflation, and very focused on getting policy sufficiently restrictive,” Powell noted in the press release.
Having hiked the federal funds rates month after month in 2022, Powell highlighted that the effects are beginning to be seen with a stable dollar. Moreover, Powell is convinced that the United States banking system is sound and resilient enough after most institutions faced significant flight to economic safety to what was previously perceived as risky including Bitcoin (BTC).
Economic Outlook and Market Impact
With the Federal Reserve committee keen on lowering the inflation to 2 percent in the long term, the stock market rallied in the past 24 hours led by Dow Jones Industrial Average Index, and the S&P 500 Index. According to our latest stock market data, the S&P 500 traded around 4237.87 on Thursday, up approximately 10 percent YTD. On the other hand, the Dow traded around 33,274.59, up approximately 0.67 percent in the past 24 hours.
The latest US economic outlook further fueled the ongoing Bitcoin recovery from the 2022 crypto bear market. As of reporting time, Bitcoin (BTC) traded around $35,240, up more than 112 percent since the calendar flipped in January. Moreover, more institutional investors have shown increased demand for digital assets through the spot Bitcoin ETF frenzy that was triggered by BlackRock Inc (NYSE: BLK).
As for the United States Growth Domestic Product (GDP), the Treasury Department earlier this week highlighted that the pace of growth will likely fall to 0.7 percent during the fourth quarter and by 1 percent for the entire year. Nonetheless, the Fed data shows a projected GDP growth of about 1.5 percent in 2024, despite the global uncertainties.
“There are risks in both directions,” Whitney Watson, co-CIO of fixed income and liquidity solutions at Goldman Sachs Asset Management, said. “The rise in inflation expectations, owing to higher gas prices, combined with strong economic activity, preserves the prospect of another rate hike. Conversely, a more pronounced economic slowdown caused by the growing impact of higher interest rates might accelerate the timeline for transitioning to rate cuts.”
- Cardano forms a bullish reversal pattern
- The Federal Reserve might signal the end of the tightening cycle
- A move above $0.35 would trigger more strength
The week ahead is important for the US dollar as the Federal Reserve of the United States announces its interest rate decision on Wednesday. The market unanimously expects the Fed to hold the funds rate at the same level as six weeks ago, the second pause in the current tightening cycle.
However the focus will not be on the actual decision. Instead, it will be on what the Fed will signal that will come next.
More precisely, is the tightening cycle over? Can the Fed declare its fight against inflation over?
Sure enough, inflation has dropped from its highs. Also, it continues to drop.
If one can draw a parallel with Europe, then the Fed should prepare for inflation to drop even further. In Europe, the prices of goods and services have dropped drastically in October. Considering that the Fed and the ECB had similar tightening cycles, one may expect similar inflation trends.
A dovish Fed would spark US dollar weakness and some markets already sniffed it. The cryptocurrency market is one example, where Bitcoin rallied to $35k recently, triggering similar moves in other cryptocurrencies such as Cardano.
ADA/USD bounced from horizontal support – how much can it rally?
One of the cryptocurrencies that anticipates a dovish Fed is Cardano. ADA/USD has rallied from horizontal support and is trying to break dynamic resistance.
Cardano rallied with other cryptocurrencies at the start of the trading year but failed to hold onto its gains. However, it found strong support at $0.25, and then it bounced from the lows.
The market formed a bullish reversal pattern that might represent the end of the bearish market. A move above $0.35 should trigger more strength, while a drop below the 2023 lows would invalidate the bullish reversal pattern.
Top 3 Cryptocurrencies to Invest In Amidst Tightening US Crypto … Analytics Insight
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Bitcoin dropped by just around 1 percent to trade around $29.9k on Friday despite the US unemployment claims coming in lower than expected.
The Bitcoin (BTC) market was arguably less concerned with the high-impact news from the United States Department of Labor regarding the unemployment claims on Thursday. Notably, the United States unemployment claims came in at 228k, which was lower than the previous and forecasted by a significant margin. As the US dollar currency index (DXY) showed some slight improvement compared to other global currencies, Bitcoin price too was slightly impacted by dropping about 1 percent in the past 24 hours. However, experts believe the Bitcoin market is facing a bigger challenge from the rising altcoin market, especially after the SEC vs Ripple judgment ruling.
Impact of US Unemployment Claims on Bitcoin and Altcoin Market
Moreover, the TOTAL3 market cap, which represents altcoins excluding Ethereum, had its macro wedge breakout confirmed in the past few days. Essentially, crypto cash flow is expected to move from Bitcoin and Ethereum to lower and medium-cap altcoins in the coming weeks.
Meanwhile, the Fed’s policies in fighting high inflation seem to be playing out in favor of the dollar. Economists highly anticipated the Fed raising the interest rates by 25 basis points on July 26 in a bid to further fight inflation.
In a bid to counter the rise of digital assets and the high demand from institutional investors, the United States Federal Reserve announced the launch of FedNow, an instant payment service. Reportedly, more than 35 banks have enlisted to the FedNow services with thousands more expected to join later.
“Over time, as more banks choose to use this new tool, the benefits to individuals and businesses will include enabling a person to immediately receive a paycheck, or a company to instantly access funds when an invoice is paid,” Fed Chair Jerome Powell said.
Bitcoin Performance
The Bitcoin market continued to flex its muscles against most global assets amid heightened demand from institutional investors. In the past few weeks, several fund managers led by BlackRock Inc (NYSE: BLK), and Valkyrie, have filed for a Bitcoin ETF, with the SEC expected to either approve, deny, or delay one filed by Cathie Wood’s Ark Invest. In a recent interview, BlackRock CEO of BlackRock described Bitcoin as digitizing gold and its mainstream adoption is imminent.
Notably, the Bitcoin market capitalization is about $580 billion compared to that of gold at nearly $11 trillion. Interestingly, US presidential candidate Robert F. Kennedy, Jr has promised to back the greenback with Bitcoin if elected for the highest office next year. Notably, Kennedy has also indicated that the digital dollar will not happen under his watch.
Meanwhile, the cryptocurrency market remains an integral part of the investment industry not only in the United States but around the world.
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- Federal Reserve raised the funds rate by another 25bp
- Jerome Powell hinted at the end of the tightening cycle
- The US dollar did not move following the Fed’s decision
The Federal Reserve of the United States (Fed) delivered its interest rate decision yesterday. It was, by far, one of the most important Fed meetings because of the tough job lying ahead of Chair Powell.
It was all about communication. On the one hand, the Fed tightened financial conditions again by raising the funds rate by 25bp.
On the other hand, it wanted to say that it was time to pause the rate hikes without the market understanding that rate cuts would follow. The market, however, priced in several rate cuts until the end of the trading year – something that Powell dismissed completely.
However, it would not be the first time when the market forced the Fed to do something it did not plan to. Therefore, there is always a struggle to find the right balance between the appropriate monetary policy decision and the right way to deliver it.
The crypto market did not move following Powell’s press conference
The rate hike was largely priced in way before the Fed’s statement. However, the press conference was supposed to move markets.
But it did not. The US dollar traded in a tight range, which was also obvious in the cryptocurrency market.
Bitcoin, for example, moves in a tight range for the industry’s standards and is still trading at levels seen at the start of April.
Part of the reason for the lack of activity might be attributed to Jerome Powell. He delivered a great press conference that left no doubts about the Fed’s intentions. Hence, both bulls and bears were content, and now the focus shifts to the jobs report on Friday.