Bitcoin Plunges 3.5%: Fed Meeting Sparks Market Fear

Market Turbulence Ahead of Critical Fed Decision

Bitcoin retreated sharply on Tuesday, dropping 3.5% to $81,300 as markets brace for the Federal Reserve’s highly anticipated policy meeting results. This pullback comes amid broader market uncertainty, with both crypto and traditional markets showing signs of pre-Fed jitters.

As highlighted in Bitcoin Traders Freeze as Fed Rate Decision Looms!, market participants remain cautious about potential policy shifts.

Key Market Movements

• Bitcoin: Down 3.5% to $81,300
• Major altcoins including Solana, Ethereum, and XRP showing deeper losses
• Nasdaq: -1.7%
• S&P 500: -1.1%

Fed Meeting Expectations

The Federal Open Market Committee’s two-day policy meeting commenced today, with Chairman Jerome Powell’s crucial press conference scheduled for Wednesday afternoon. While no immediate rate changes are expected, traders are closely monitoring for any hints of a more dovish stance in response to recent market volatility and inflation trends.

According to CME FedWatch data:

• 0% probability of rate cut tomorrow
• 20% chance of rate cut in May
• 66% probability of rate reduction in June

Market Implications

The current market reaction suggests growing concern that the Fed may maintain its hawkish stance longer than previously anticipated. February’s modest inflation decline and relatively contained market correction could give the Fed room to remain cautious about policy easing.

Source: CoinDesk