As the Federal Open Market Committee (FOMC) of the Federal Reserve held a monetary policy meeting from March 18 to 19, the price of Bitcoin once again fell into violent fluctuations. Since hitting a high of $84,500 on March 17, the price of Bitcoin has fallen all the way to $81,300, a drop of nearly 4%. This fluctuation is generally regarded as the market’s early reaction to the results of the FOMC interest rate meeting. Although historical data shows that FOMC meetings often become “volatility catalysts” in the crypto market, the market behavior on the eve of this meeting revealed abnormal signals-open interest contracts did not shrink significantly, and spot ETF fund inflows rebounded against the trend. Does this mean that the price of Bitcoin will break the curse of “every FOMC must fall”?
From a historical perspective, the period before and after the FOMC meeting is usually a “high-risk period” for the price of Bitcoin. Since the beginning of 2024, after the Federal Reserve kept interest rates unchanged for four consecutive times, the price of Bitcoin has experienced varying degrees of correction. The only exception occurred in February 2024, when BTC rose against the trend driven by the halving expectations and the listing of spot ETFs. However, the third rate cut in December of the same year unexpectedly became a stage top, and the price of Bitcoin quickly fell after reaching $108,000. This phenomenon shows that the market’s interpretation of interest rate policies is often complex and changeable, and the logic of “rate cuts are good news” is not completely applicable to the crypto market.
It is worth noting that the current market seems to be challenging the traditional model. Although Bitcoin prices continued to fall this week, futures open interest did not fall as sharply as usual. CoinGlass data shows that the open interest on the eve of the March meeting was stable at around $37 billion, in sharp contrast to the 10% drop before the September and November 2024 interest rate meetings. This may suggest that traders are betting on unilateral market conditions or that their expectations of the Fed’s policies are converging. The CME FedWatch tool shows that the market’s expected probability of maintaining interest rates unchanged is as high as 99%, and the neutral stance may have weakened the urgency of traditional “deleveraging” operations.
At the same time, the flow of funds in the spot Bitcoin ETF also released contradictory signals. Over the past year, FOMC meetings have been synchronized with ETF fund outflows, but on Monday (March 17), a net inflow of $275 million was recorded, ending weeks of selling. Some analysts believe that this may be a strategy for institutional investors to hedge against policy uncertainty, or a forward-looking layout betting on the Fed’s release of dovish signals. If the interest rate statement mentions the future path of interest rate cuts or maintains an accommodative tone, the price of Bitcoin may take advantage of the opportunity to counterattack; conversely, hawkish statements may intensify short-term selling pressure.
Market divergence is particularly evident in the field of derivatives. Although a whale previously opened a $500 million short order in an attempt to short, its position has been quietly closed, while retail leveraged long orders continue to accumulate. Crypto trader Master of Crypto predicted on the social platform: “There will be a huge shock after the FOMC.” Currently, the price of Bitcoin is hovering near the key support level of $81,000. If it falls below, it may trigger a chain of liquidations. On the contrary, if it stabilizes at $82,500, it is expected to regain upward momentum. Regardless of the outcome, the policy storm set off by the Federal Reserve will ultimately set the tone for the next stage of Bitcoin prices.
