Bitcoin’s rally could be tested by profit-taking ahead of Wednesday’s Fed meeting

Bitcoin heads into the March Federal Open Market Committee meeting with strong momentum, trading above $74,000 after eight consecutive daily gains. However, data from bitcoin lender Two Prime suggests this strength may mask a recurring pattern: FOMC meetings have historically acted as short-term bearish catalysts for BTC.

In 2025, bitcoin posted negative returns in the 48 hours following seven of eight FOMC meetings. Even in May, when BTC rallied sharply, the broader trend shows consistent post-meeting weakness, regardless of whether the Fed held rates or adjusted policy. This points to the event itself, rather than the outcome, as the main driver of volatility.

The upcoming decision is widely expected to be uneventful. Markets are pricing near certainty—around 99%—that the Fed will maintain rates in the 3.50%–3.75% range. Futures markets only anticipate a single 25-basis-point rate cut by year-end, reinforcing a “higher for longer” outlook, even with new Fed chair Kevin Warsh set to take over in June.

Macro risks further complicate the picture. Rising tensions in the Middle East and oil near $100 a barrel are likely to push CPI inflation higher, limiting the Fed’s ability to ease policy amid a weakening U.S. jobs market.

With bitcoin entering the meeting in a buoyant state, the main risk is a classic “sell the news” reaction.