Today, Nansen Research published an update stating that the Fed’s decision on rates should not have any significant effect on the price of Bitcoin (BTC), currently around 97,000 USD.
The hypothesis is that the Fed will not only confirm the current rates, but will also confirm the markets’ hypotheses on three possible cuts of 25 basis points during 2025.
In reality, it is not at all certain that this will happen, because if today’s lack of rate cuts is expected, it is not at all certain that the Fed will end up cutting rates by 75 basis points over the rest of the year.
Therefore, if President Powell’s words were to confirm this hypothesis, the price of Bitcoin might indeed not move significantly, but if he were to outline a different scenario, the markets might have to scramble and reposition quickly, generating volatility.
The volatility on the price of Bitcoin (BTC): will the oscillations around 97,000 USD continue?
In theory, in fact, volatility was expected today on the crypto markets, and something of the sort has already happened in part, with an unexpected rise during the night of BTC from 94,000 USD to 97,000.
While on one hand the expected increase in volatility might have already occurred, on the other hand, in similar past situations, the words of Powell have nonetheless generated some.
Therefore, it is not at all certain that the volatility expected for today has already been exhausted.
The key point is precisely the outlook for the rest of 2025.
The markets are not only already pricing in the lack of a rate cut today, but they are also pricing in a lack of a cut in June. The most important thing, however, is the current positioning on three cuts of 25 basis points from July to December, which is by no means a bull.
Since the Trump tariffs should increase inflation, if they are not removed or scaled down soon, it is very likely that the Fed will go into a wait-and-see mode regarding rate cuts, at least until the issue is clarified. In theory, there is time before July for it to be clarified, but it is not guaranteed. Moreover, it is not certain that it will be clarified with a scaling down of the tariffs.
More optimistic market scenarios
The Nansen report states that market scenario prices have become more optimistic. It also highlights how technical data favor BTC over stocks.
According to what Aurelie Barthere writes on the Nansen blog, BTC is slowly rising again towards its historical highs, with altcoins recovering.
To this must be added that such a scenario is also shared by other analysts, particularly thanks to the triumphal ride of the ETFs on BTC spot in recent weeks.
Also because in the USA, consumption is slowing down, but it still remains at decent levels, with layoffs not yet increasing.
Moreover, the markets have already priced in a similar scenario, namely a lower risk of recession in the USA and a higher valuation of more favorable macroeconomic results.
Barthere writes that the markets in recent weeks have become less pessimistic, and although the bull scenario should be approached with caution, in search of further upward catalysts, the flow of news coming from the USA has become better compared to that of a few weeks ago.
However, further good news on progress in trade negotiations is needed to validate the bull scenario.
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Barthere also emphasizes that the political pressure on the Fed Chairman has increased again, but this should not influence the FOMC’s decision on rates.
In fact, inflation in the USA is still too high, and there is still the risk of an increase due to Trump’s tariffs, even in the case of a reduction to 40% for China and 10% for the rest of the world.
Furthermore, the labor market is indeed cooling, but it is not yet cracking, leaving the Fed effectively with its hands tied.
Therefore, the U.S. central bank will remain on hold, waiting for greater clarity on the impact of Trump’s policies on the inflation/growth mix.
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The nansen report specifies that the technical data of BTC remain good, with the fast moving averages surpassing the slow moving averages, and indeed even better compared to those of the US stock market.
It is instead more difficult to venture into predictions about altcoins, at least until we have further confirmations of being in a bull scenario.
It really seems that the crypto market is waiting for a restart, and that this can only come from Bitcoin.
