Bitcoin and Ethereum extended their recent gains on Tuesday, climbing sharply as global markets turn their attention to the Federal Open Market Committee (FOMC) meeting in Washington.
Traders are increasingly betting that Fed Chair Jerome Powell may hint at rate cuts in the months ahead, fueling optimism in risk assets.
Bitcoin touched its highest level in nearly a month, while Ethereum also moved higher, supported by fresh buying activity across major exchanges.
Market analysts say the rally reflects a shift in sentiment, with investors positioning for more accommodative monetary policy.
According to on-chain data from CryptoQuant, stablecoins are witnessing significant inflows even as BTC and ETH outflows continue.
This suggests that investors are preparing liquidity reserves to re-enter the market depending on how the Fed’s tone develops.
At the same time, Asian trading desks reported nearly $4.5 billion in liquidity tests during early sessions, underscoring the heightened uncertainty ahead of Powell’s remarks.
“Crypto assets are moving in lockstep with expectations of a Fed pivot,” said Maria Chen, a digital assets analyst at BlockPulse Research.
“If Powell strikes a softer tone on inflation, we could see further momentum in Bitcoin and Ethereum, but a hawkish surprise could quickly unwind gains.”
The FOMC’s stance has become one of the most critical drivers of crypto price action this year, as tighter monetary conditions have weighed heavily on speculative assets.
With the next policy update imminent, the spotlight is firmly on Powell’s message and how it will ripple through digital currencies and global equity markets alike.
For now, Bitcoin and Ethereum are holding steady near key resistance levels, with traders bracing for another round of volatility once the Fed outlines its next steps.
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