Bitcoin Price Braces For FOMC Volatility As History Shows Major Post‑Fed Sell‑Offs

The Bitcoin price is under increasing pressure ahead of Wednesday’s Federal Open Market Committee (FOMC) meeting, which has historically corresponded with big price movements in the market’s largest cryptocurrency.

The Federal Reserve (Fed) is widely expected to leave interest rates unchanged at this meeting. Economists surveyed by financial data provider FactSet anticipate the federal funds rate — the benchmark rate banks use for overnight lending — will remain in the 3.5% to 3.75% range. 

Such a pause would follow three consecutive rate cuts delivered by the Fed toward the end of last year, a shift that initially fueled optimism across risk assets, including the Bitcoin price.

Despite that earlier momentum, the Bitcoin price has struggled to maintain its footing. Ahead of the FOMC decision, the cryptocurrency is trading near $87,780, roughly 30% below the all‑time highs reached last year. 

Market analyst Ali Martinez has pointed to Bitcoin’s historical behavior around FOMC meetings as a reason for caution. In a recent post on X (previously Twitter) Martinez highlighted that expectations for a January rate cut are extremely low, estimated at just 2.8%, signaling that meaningful policy easing is unlikely in the near term. 

That backdrop, he argues, has often set the stage for increased volatility for the Bitcoin price rather than sustained upside. Looking back at 2025, Martinez noted that Bitcoin reacted negatively after the vast majority of the Fed’s policy meetings. 

Of the eight FOMC decisions held during the year, seven were followed by notable declines for the Bitcoin price. The January meeting was followed by a 27% drop, March saw a 14% decline, June was down 8%, July slipped 6%, September fell 7%, October recorded a 29% pullback, and December ended with a 9% loss. 

The analysts noted that the only exception seen in the year came in May, when the Bitcoin price briefly rallied about 15% after the decision. 

From a technical and on‑chain perspective, analyst BitBull also sees the Bitcoin price approaching a critical moment. BitBull noted on social media that the asset has entered what she describes as a key on‑chain decision zone. 

At current levels, the Bitcoin price is trading almost exactly at the Active Investor Mean, estimated near $87,500. This level represents the average cost basis for active buyers, placing much of that capital at breakeven. 

BitBull explained that pressure is building on both sides of the price. Above current levels, the short‑term holder cost basis sits near $96,500, meaning many recent buyers are already underwater. 

As a result, any upward move toward that zone could face selling pressure as traders look to exit at reduced losses. On the downside, the True Market Mean at around $80,700 has historically marked the boundary between a “routine correction and deeper structural weakness.” 

Further below, the realized price near $56,000 suggests that long‑term holders remain firmly in profit and largely unshaken by recent volatility.

BitBull argues if the Bitcoin price can maintain support above the $87,500 level, it would indicate that active capital is defending its position and that broader market strength remains intact. A sustained break below that level, however, could open the door for a move toward $80,700.

Featured image from OpenArt, chart from TradingView.com