Bitcoin price has fallen below $71,000 on Wednesday after the Federal Reserve left its benchmark interest rate unchanged at 3.5% to 3.75%, prompting renewed pressure across risk assets. The digital asset was down more than 5% on the day as traders reacted to a policy stance that kept borrowing costs elevated and offered little support for expectations of faster easing.
The Federal Open Market Committee voted 11-1 to hold rates steady at the end of its March meeting. Federal Reserve Governor Stephen Miran dissented and supported a 25-basis-point cut, but the broader committee remained focused on inflation that continues to run above target and a labor market that is showing slower job growth. In its policy statement, the Fed said uncertainty around the economic outlook remained elevated and referred to developments in the Middle East as a factor clouding the outlook.
Bitcoin’s decline came as investors adjusted to a policy path that still points to limited rate cuts. The central bank maintained projections for one quarter-point reduction in 2026 and one in 2027, while seven policymakers projected no cuts in 2026. The median federal funds rate projection for the end of 2026 remained at 3.4%, and the longer-run rate estimate was revised to 3.1%.
Fed Keeps Policy Tight as Inflation Stays Above Target
The Fed’s decision was widely expected, but market attention turned to Chair Jerome Powell’s remarks after the announcement. Powell said the committee is trying to balance downside risks to the labor market with upside risks to inflation, especially as oil prices rise during the conflict involving Iran. Brent crude has climbed to about $108 a barrel, while U.S. gasoline prices have risen to $3.80 per gallon, according to the details provided during the coverage of the meeting.
Powell also addressed questions about the duration of inflation pressures. “I think we have to be humble about knowing how long it will take for tariffs to go all the way through the economy,” he said, adding that earlier inflation shocks lasted longer than expected. On the broader economy, Powell said, “The U.S. economy has really been just doing pretty well through a lot of significant challenges over the past few years.”
The central bank’s stance kept pressure on markets that are sensitive to liquidity conditions. Bitcoin has often benefited from lower rates and easier financial conditions, but the latest Fed guidance reinforced a higher-for-longer environment. That backdrop supports yields on cash and government debt, limiting near-term support for non-yielding assets such as bitcoin.
Jerome Powell Addresses Leadership Questions
Reporters also pressed Powell on his future as chair, with his term set to end on May 15. Powell said he would remain in place if a successor is not confirmed in time. “I had no intention of stepping down until the investigation is well and truly over,” he said, according to the remarks cited from the press conference.
He also told reporters, “I’m not going to have any more to say on those issues, by the way,” when questions continued about his leadership.
The comments came as President Donald Trump has intensified criticism of Powell in recent months and named Kevin Warsh as his nominee to succeed him. Trump has repeatedly called for lower interest rates and urged the Fed to move more aggressively. At the same time, the Justice Department is conducting a criminal investigation tied to renovation cost overruns at the Fed’s headquarters, a matter Powell has rejected as politically motivated.
Bitcoin Reacts to “higher for longer” Outlook
Bitcoin’s drop reflected the market’s response to a policy stance that still points to restrictive financial conditions. Barron’s reported that Bitcoin fell 3.9% to about $71,678 after the Fed decision, while Ethereum and XRP also declined.
That pullback followed a recent attempt by BTC to stabilize above resistance in the $74,500 to $76,600 area.
Source: X
From a chart perspective, the current move leaves traders watching whether Bitcoin can defend the higher-low structure built above the mid-$65,000 zone. A move back toward resistance would keep the $76,000 to $80,000 area in view, while failure to hold support would weaken the current recovery setup. According to crypto analyst Michael Van de Poppe, this BTC price trend is a short-term risk-off shift tied to the Fed and the rise in oil prices.
Be the first to comment