Jerome Powell's decision on Wednesday could redefine Bitcoin's trend

With the Federal Reserve meeting scheduled for Wednesday, the Bitcoin market remains waiting for a major catalyst. Although interest rates are widely expected to stay at 3.50% - 3.75%, it is the tone set by Jerome Powell and his inflation outlook that will captivate crypto investors and stock market participants.

Market Expectations Ahead of the Fed Meeting

On Tuesday, Bitcoin experienced a notable correction, falling to around $70,870, marking a significant decline after briefly surpassing $76,000 during Asian trading hours. This consolidation reflects investor uncertainty ahead of the Fed’s announcements. The Nasdaq closed up 0.5% and the S&P 500 gained 0.25%, providing a mixed context for risk assets.

The key question analysts are asking concerns the future trajectory of rates. According to K33 research, the probability that the Fed will keep rates unchanged at the July meeting has risen to over 60%, up from just 22% last month. This shift in expectations suggests a more restrictive scenario, with rate cuts now pushed back to the end of 2026.

Powell’s Critical Role in Rate and Inflation Trajectory

Jerome Powell faces the delicate task of navigating between two major risks: the recent rise in oil prices driven by geopolitical tensions, and the inflationary implications it could generate. Bitfinex’s analyst team has identified a strategic issue: will Powell characterize this oil increase as a temporary shock or as a sign of stagflation?

If Powell maintains a dovish stance by describing the rise in energy prices as transitory, it could prolong the crypto rally and support risk assets. Conversely, a more hawkish tone combined with high PPI (Producer Price Index) data expected on Wednesday would strengthen the dollar and weigh on cryptocurrencies and tech stocks.

Bitcoin Trends and Crypto Asset Reactions

Tuesday’s outperformers were crypto stocks, with Circle (CRCL), a major stablecoin issuer, rising 5%, while miner Bitdeer (BTDR) jumped 12%. These movements reflect differentiated market interest across crypto segments.

Bitfinex analysts anticipate a temporary consolidation of Bitcoin between $70,000 and $76,000 as they await clarification from Jerome Powell. A major PPI report followed by restrictive FOMC communication would represent the most adverse scenario for risk assets, according to their forecasts.

Predictive Markets Attract Interest with 5c© Capital

Alongside macroeconomic dynamics, the crypto ecosystem is seeing the emergence of a new investment opportunity. 5c© Capital, a new venture capital firm, has just launched with support from the CEOs of Polymarket and Kalshi to fund companies in the predictive markets sector.

The fund aims to raise up to $35 million and support around 20 early-stage startups over two years. Its focus is on infrastructure and technology services—data tools, liquidity provision, compliance systems—rather than simple trading platforms. This initiative reflects the rapid growth in trading volumes and the increasing interest from institutional investors and retail traders in predictive markets, which has already attracted over 20 early investors, including a portfolio manager from Millennium Management.