- The Federal Reserve kept interest rates unchanged at 3.50%-3.75%, but three policymakers voted for a 25-basis-point increase.
- The central bank said inflation remains above target while economic activity, productivity and investment continue to show strength.
- Bitcoin fell toward $63,300, while Ethereum dropped below $1,900 as traders reassessed the prospect of higher-for-longer interest rates.
- Despite continued institutional inflows into spot Bitcoin ETFs, risk appetite weakened following the Fed’s hawkish message.
Fed Holds Rates but Signals Inflation Fight Is Not Over
The Federal Open Market Committee voted 9-3 to leave the federal funds target range at 3.50%-3.75%, a decision that matched market expectations but carried a firmer policy message than many investors anticipated.
Three officials – Beth Hammack, Neel Kashkari and Lorie Logan – dissented in favor of a 25-basis-point increase, highlighting continued concern that inflation remains above the Fed’s 2% objective.
In its policy statement, the central bank described the U.S. economy as expanding at a solid pace, supported by resilient employment, strong productivity growth and continued business investment. Officials also pointed to energy-related supply shocks as a factor keeping inflation elevated and reiterated their commitment to restoring price stability.
Rather than signaling that the tightening cycle has ended, the statement suggested policymakers remain prepared to act if inflation proves more persistent than expected.
Bitcoin Tests Long-Term Support
Bitcoin traded around $63,270, extending losses after the Fed announcement as investors reduced exposure to risk assets.
On the four-hour chart, BTC has fallen below its 20-, 50- and 100-period moving averages, leaving the 200-period moving average near $63,200 as the most significant technical support. A sustained move below that level could expose the recent swing low around $62,800, while any recovery would first need to reclaim resistance between $64,200 and $64,700, where several moving averages are currently converging.
The broader cryptocurrency market also weakened, with total market capitalization falling to approximately $2.17 trillion, while the Fear & Greed Index slipped to 34, indicating that investor sentiment has shifted further into fear.
Ethereum Loses Momentum Below Key Resistance
Ethereum also came under pressure, trading near $1,882 after failing to hold above short-term resistance.
The asset remains below its 20-period and 50-period moving averages, while continuing to trade above the 100-period moving average near $1,883, an area that is now acting as immediate support. The 200-period moving average around $1,794 continues to define the broader medium-term trend.
Momentum indicators have also softened. The Relative Strength Index (RSI) has declined to approximately 45, remaining below its signal line and pointing to weakening buying momentum without yet entering oversold territory.
A recovery above $1,900-$1,915 would improve Ethereum’s short-term technical outlook, while a break below $1,880 could increase the likelihood of another test of lower support levels.
Higher-for-Longer Outlook Keeps Crypto Markets Focused on Economic Data
Although the Federal Reserve left its benchmark interest rate unchanged, policymakers made clear that inflation remains above target and that additional tightening has not been ruled out. The combination of a split vote, resilient economic growth and persistent price pressures reinforced expectations that interest rates could remain elevated for longer.
For cryptocurrency markets, the focus now shifts to incoming inflation, employment and economic growth data, which will shape expectations ahead of the Fed’s next meeting. Higher borrowing costs typically reduce liquidity available for higher-risk assets, making macroeconomic releases a key driver of sentiment across Bitcoin, Ethereum and the broader digital asset market. Until there is clearer evidence that inflation is moving sustainably toward the Fed’s 2% target, investors are likely to remain sensitive to economic data that could alter the path of monetary policy.
This version is tighter, avoids repeating that the Fed held rates, and naturally links the hawkish message to the next catalyst for crypto markets.
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