FOMC today: Will the crypto market explode or crash?

Crypto Market Under Pressure: FOMC Minutes Today

The cryptocurrency market is on maximum alert. Today, the Federal Reserve unveils the minutes from its January meeting, a technical yet explosive document capable of shifting the trend within seconds. Investors, whether whales or retail traders, are waiting to see if central bankers maintain a hawkish stance or finally open the door to monetary easing.

In a tense macroeconomic environment, every word of the report will be analyzed by trading algorithms. A positive surprise could propel Bitcoin toward a new breakout, while an overly harsh tone could trigger cascading liquidations on leveraged positions.

Bitcoin and Altcoins: What to Expect After the Fed Announcement?

History often repeats itself in financial markets: FOMC Minutes act as a catalyst for extreme volatility. If the document reveals that the majority of Fed members are still concerned about persistent inflation, the market could interpret this as a bearish signal. In this scenario, risk assets like cryptocurrencies could experience an immediate retracement, with investors preferring to secure their gains (take profit) and seek refuge in the dollar.

Conversely, if the minutes hint at concrete discussions about future rate cuts, the effect could be electric. Such a signal would be perceived as the long-awaited green light for a massive rally.

It’s crucial to note that the market’s initial reaction is often misleading. We frequently observe “fakeout” movements: a quick wick in one direction to liquidate fragile positions, followed by a violent reversal.

Indeed, the FOMC minutes are not the element that should truly be analyzed, but rather the market’s direction leading up to this meeting scheduled for 8 PM (French time) this Wednesday evening.

If Bitcoin rises toward this announcement until 8 PM, then the probability of a bearish reversal in the following days will be more likely. Conversely, if the price falls until 8 PM, then a rebound is more probable for the end of the week.

Key Levels to Watch to Avoid the Liquidation Trap

The Minutes publication is the favorite playground for market makers to hunt liquidity. To avoid getting trapped, it’s essential to monitor major support and resistance zones.

Currently, Bitcoin’s 1-hour range needs to be observed. A rise to $70,000 could be a good entry for a short scalp, while a loss of $68,200 (the mid-range) would push Bitcoin toward $65,000, a good zone for a long scalp.

Altcoins, often more volatile, could react with a multiplier effect. If Bitcoin shows strength, certain high-cap tokens could literally take off. However, caution is warranted: in case of a negative shock from the Fed, altcoins are generally the first to suffer double-digit losses. Risk management must be the absolute priority for any active trader during this session.

Faced with the uncertainty of the Fed Minutes, the wisest strategy for long-term investors often remains observation. Entering a position minutes before such an announcement resembles casino gambling more than rational trading. The market will eventually choose its side: bullish or bearish. Once the trend is confirmed by daily candle closes, entry opportunities will be clearer and less risky.

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