Bitcoin (BTC) retraced its recent gains on Wednesday as traders anticipated potential fakeout moves surrounding the Federal Reserve’s interest-rate announcement.
Key points:
Bitcoin struggled to maintain its recent rise above $94,500 as uncertainty surrounded the Fed’s interest-rate decision.
Traders are bracing for unpredictable price movements in both directions around the FOMC meeting.
Volatility in Japan-centric risk assets is emerging as the next significant concern.
Bitcoin price variations disregard the yearly open
Data from Cointelegraph Markets Pro and TradingView indicated that BTC’s price was trending downward at the opening of Wall Street.
After reaching $94,650 the previous day, BTC/USD was unable to sustain higher levels, including the 2025 yearly opening price.
As of this writing, the pair was trading at around $92,000, with market participants anticipating volatile price actions in light of the rates announcement and press conference.
“FOMC meetings can be quite tricky,” crypto trader, analyst, and entrepreneur Michaël van de Poppe noted on X.
“Price movements typically ensnare everyone before the actual shift, so even if Bitcoin falls to $91K, I’m not overly concerned about it.”
Trader Daan Crypto Trades pointed out that exchange order books lacked significant liquidity clusters on either side of the price following the upward adjustment.
“$BTC eliminated that $93K-$94K liquidity cluster as discussed yesterday. This was the most logical point from a liquidity perspective. With that cleared, there’s no significant area nearby,” he informed his X followers, sharing data from monitoring resource CoinGlass.
“However, as the price consolidates, some clusters are forming around the $90K & $95K levels.”
As previously reported by Cointelegraph, markets have already priced in a significant likelihood of the Federal Open Market Committee (FOMC) reducing rates by 0.25%. Nevertheless, Fed Chair Jerome Powell’s future policy outlook remains uncertain.
“The rate decision is nearly fully accounted for, but the emphasis will be on Powell’s tone,” trading company QCP Capital stated in its latest “Asia Color” market update for the day.
“Given the lack of new data since the last meeting, the Fed is unlikely to give any advance notice of a January decision, leading traders to scrutinize every detail of the press conference.”
Japan reintroduces familiar crypto risks
In continuation, QCP noted that after the FOMC response, risk-asset traders would divert their attention back to Japan, where the bond market is exhibiting unusual behavior.
Related: Bitcoin retail inflows to Binance ‘plummet’ to a record low of 400 BTC in 2025
“The BOJ meeting on December 19 has emerged as the next crucial risk event,” they elaborated.
“JGB yields are at multi-decade highs, with the 10Y near 1.95%, the highest since 2007, and the 30Y around 3.39%, a record level, exceeding 100bps more than a year prior.”
Potential volatility could arise from bonds affecting the yen carry trade — an issue experienced in 2024 when the crypto markets reacted in real-time to this dynamic.
Japan’s central bank has indicated it may diverge from global trends and raise interest rates next.
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This article does not contain investment advice or recommendations. Every investment and trading move entails risk, and readers should perform their own research when making decisions. While we strive for accuracy and timely information, Cointelegraph does not guarantee completeness or reliability of any information in this article. This article may contain forward-looking statements that involve risks and uncertainties. Cointelegraph will not be responsible for any loss or damage arising from reliance on this information.
