Bitcoin trades at $76,000 as investors brace for a 25-basis-point Fed hike, with the central bank's upcoming dot plot projections and Chair Kevin Warsh's commentary set to dictate the next move for risk assets.
Bitcoin faces potential headwinds if the Fed's dot plot signals further tightening, reinforcing higher yields and a stronger dollar.
Ether dropped sharply ahead of the Fed decision and could see further pressure if rate projections turn hawkish.
Brent crude prices are elevated, contributing to inflation concerns, but declined on the day due to additional Saudi supply.
Bitcoin and Ether face mounting pressure as markets price in a 93% probability of a 25-basis-point Federal Reserve rate hike. Investors are shifting focus from the headline rate move to the Fed's updated dot plot and Chair Kevin Warsh's commentary, which will signal the future trajectory of monetary policy. With 10-year Treasury yields nearing 5%, risk assets remain sensitive to hawkish projections that could further strengthen the dollar.
The 25-basis-point hike is already largely priced into the market. The dot plot provides insight into policymakers' expectations for future rate levels, which determines the long-term outlook for inflation and monetary tightening.