Bitcoin Soars 4.97% After Fed Announcement

The leading cryptocurrency reaches $87,000 after Jerome Powell's remarks about possible rate cuts in 2025 and 2026. Is the market ready for a rally?

The price of Bitcoin experienced a significant increase of 4.97%, closing at $86,827 and reaching a high of $87,000, after Federal Reserve (FED) Chairman Jerome Powell anticipated two rate cuts in 2025 and two in 2026. The decision to keep the interest rate at 4.50% was interpreted as positive for risk assets, attracting traders and increasing open interest in Bitcoin futures by 7.29%, reaching $52.15 billion.

The Bitcoin price broke through the dynamic resistance of the 200-day exponential moving average (EMA200), located at $85,500, marking a shift in long-term bearish sentiment. / Tradingview

The Fed Holds Rates, and Bitcoin Reacts

The Fed's announcement to hold interest rates at 4.50% was met with optimism by risk-asset markets, including Bitcoin. Jerome Powell noted that while inflation remains a challenge, the US economy remains strong, reducing the urgency for rate cuts in the short term. However, his comments regarding possible rate cuts in 2025 and 2026 boosted bullish sentiment in the cryptocurrency market.

Bitcoin Breaks Key Barriers

Bitcoin's price broke through the dynamic resistance of the 200-day exponential moving average (EMA200), located at $85,500, marking a shift in long-term bearish sentiment. Although the cryptocurrency is still below the 50- and 100-day moving averages (EMA50 and EMA100), the bullish momentum suggests that buyers are gaining ground. The next key resistance lies at $89,900, a level that coincides with the 50-EMA.

Increasing Liquidity and Open Interest

Open interest in Bitcoin futures increased 7.29% in the last 24 hours, reaching $52.15 billion, indicating increased trader interest in the cryptocurrency. In the spot market, total traded volume was $6.78 billion, with buy volume of $3.40 billion and sell volume of $3.38 billion. The positive CVD (Cumulative Volume Delta) of $21.85 million suggests that buyers slightly dominated the day.

Bitcoin Outlook

Although Bitcoin reduced its losses so far in 2025 to -7.25%, it maintains gains of 28.37% over the past year. The slight increase in trading volume, although below the average of the past 25 days, indicates that buyers have moderate strength. If global economic uncertainty persists and the dollar continues to weaken, Bitcoin could consolidate its position as a safe haven for investors.

The Fed's announcement and Jerome Powell's remarks gave the cryptocurrency market a respite, pushing the Bitcoin price above key levels. Although the path to a sustained uptrend still faces resistance, the increase in liquidity and open interest suggest that traders are betting on a positive future for the leading cryptocurrency. Investors should monitor the Fed's next moves and global economic developments to identify opportunities in the market.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Please do your research and consult a professional before making financial decisions.