Bitcoin Slips Amid Market Jitters Ahead of Fed Decision

Market Retreats as Investors Await Fed Policy Decision

Risk assets took a step back on Tuesday following a brief period of optimism, as investors braced for the outcome of this week’s U.S. Federal Reserve policy meeting.

Bitcoin (BTC) was trading at $81,300 at the time of writing, marking a 3.5% decline over the past 24 hours. Other major cryptocurrencies, including Solana (SOL), Ethereum (ETH), and XRP, posted slightly steeper losses. Equities also mirrored the downturn, with the Nasdaq falling 1.7% and the S&P 500 declining 1.1% roughly an hour before the market close.

The Federal Open Market Committee (FOMC) kicked off its two-day policy meeting today, with the official statement and a press conference from Fed Chair Jerome Powell scheduled for Wednesday afternoon.

While the central bank is widely expected to maintain current interest rates, market participants will closely scrutinize Powell’s remarks for any signs of a shift toward a more accommodative stance. Given recent market volatility and cooling inflation, some investors are hoping for a more dovish outlook from the Fed.

Tuesday’s market action, however, suggests that concerns persist about the central bank’s readiness to ease monetary policy. The February inflation report showed only a modest decline, and many investors remain cautious about the Fed’s commitment to maintaining higher rates for longer.

According to CME FedWatch, rate traders currently see zero probability of a rate cut on Wednesday, with only a 20% chance of an adjustment at the May meeting. However, expectations for a rate cut increase significantly by June, with market odds sitting at 66% for a reduction in borrowing costs.