Bitcoin could potentially recover above the significant psychological threshold of $90,000 as concerns about monetary inflation ease in the largest economy worldwide.
The two-month decline in Bitcoin’s (BTC) price has sparked multiple warnings that the current bullish trend might be coming to an end, challenging the theory of the traditional four-year market cycle.
Despite prevailing worries among investors, Bitcoin appears poised for a recovery past the $90,000 mark, attributed to diminishing inflation fears in the U.S., as noted by a leading analyst.
"We might observe a counter-trend rally since prices have become oversold, and there’s a strong possibility that the Federal Reserve will adopt a mildly dovish stance," the analyst stated, adding, “This isn’t a significant bullish shift but rather some adjustments from policymakers. We forecast that BTC will stay within a broader consolidation range but could potentially climb back toward $90,000.”
Investor sentiment could also see an uplift following remarks from the Federal Reserve Chair, who indicated that the Fed would "hold steady amid increasing uncertainties faced by households and businesses." This sentiment was reiterated in a recent social media update, which also highlighted the Chair’s skepticism regarding the lasting inflationary effects of past tariffs, mentioning a similar scenario in 2019 where tariff-induced inflation turned out to be temporary, prompting the Fed to lower rates three times.
As investors anticipate the upcoming Federal Open Market Committee (FOMC) meeting, they hope to gain insights into the Fed’s monetary policy for the remainder of 2025, a development likely to influence their appetite for riskier assets like Bitcoin.
Analysts suggest that the outcome of the FOMC meeting will be instrumental in determining Bitcoin’s future trajectory. Traders will be closely monitoring any signals regarding the conclusion of the Fed’s quantitative tightening (QT) initiative, which could inject liquidity back into the markets and potentially support risk assets.
"The forthcoming Fed decision could act as a significant catalyst for market movements," the analyst observed, adding, "If the Chair adopts a more dovish approach, Bitcoin might experience a resurgence of bullish momentum." However, ongoing inflation pressures or a reaffirmation of stringent financial conditions, such as high interest rates or continued liquidity restraints, could limit potential gains.
Currently, markets are reflecting a near certainty—at 99%—that the Fed will maintain steady interest rates, as indicated by recent analyses from a leading financial platform.
However, investors have drastically reduced their exposure to U.S. equities, dropping by a historically significant 40 percentage points between February and March, based on a recent survey, raising concerns that fears of a recession may negatively impact Bitcoin’s price movements.
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