Bitcoin heads into the March Federal Open Market Committee (FOMC) meeting with strong momentum, trading above $74,000 after eight consecutive daily gains. However, data compiled by bitcoin lender Two Prime suggests this strength may mask a recurring pattern, FOMC meetings have historically acted as short term bearish catalysts for BTC.
Looking at 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 points to consistent post meeting weakness regardless of whether the Fed held rates or shifted policy direction. This reinforces the idea that the event itself, rather than the outcome, drives volatility.
The upcoming decision is unlikely to deliver surprises. Markets are pricing a near certainty, around 99%, that the Federal Reserve will hold rates steady in the 350 to 375 basis point range. Meanwhile, the futures market is only pricing in a single 25 basis point rate cut by the end of the year, reinforcing a higher for longer backdrop. Even with a new Federal Reserve chair, Kevin Warsh, expected to take over in June.
Macro risks further complicate the picture. Escalating conflict in the Middle East and oil prices hovering around $100 a barrel are likely to put upward pressure on CPI inflation numbers, limiting the Fed’s flexibility to ease policy on top of a weakening jobs market.
With bitcoin entering the meeting in a buoyant state, the risk shifts toward a classic sell the news reaction.