On January 28, 2026 (Beijing time, early January 29), the Federal Reserve decided to maintain the benchmark interest rate unchanged at 3.5% to 3.75%. Although this decision aligned with the market's general expectations, its content and Powell's statements were interpreted by the market as 'hawkish,' bringing new uncertainties to the cryptocurrency market.
Key points of the Federal Reserve's decision
1. Interest rate decision: Pause on rate cuts
· Decision: Maintain the federal funds rate target range at 3.5%-3.75%.
· Voting: 10 votes in favor, 2 votes against. Two board members advocated for a 25 basis point rate cut.
· Market expectations: Before the meeting, the market's expectation for a rate cut in January was extremely low, only 2.8%.
2. Policy statement: wording turns optimistic
· Economic assessment: upgraded the description of economic activity from 'moderate' to 'solid'.
· Employment market: points out that 'the unemployment rate has shown signs of stabilization' and removes previous wording about 'increased risk of employment downturn.'
· Inflation judgment: reiterates that 'inflation remains slightly high', with a target of 2%.
3. Key points from Powell's statement
· Excluding interest rate hikes: clearly states that rate hikes are not a fundamental assumption.
· Interest rate path is ambiguous: emphasizes that there is no preset path and will make decisions at 'successive meetings', without providing clear signals for recent interest rate cuts.
· Overall tone: made a 'slightly optimistic assessment' of the economic outlook, believing that the labor market may be stabilizing.
Potential impact on the cryptocurrency market
This decision mainly affects the cryptocurrency market through two paths:
1. Macroeconomic liquidity expectations: short-term bearish
· Hawkish signals suppress easing expectations: a more optimistic view on the economy, removal of employment risk wording, and reduced urgency for the Fed to cut rates. Analysts believe this indicates a shift in focus from unemployment to controlling inflation. Market expectations for short-term rate cuts (e.g., in March) have further cooled, and expectations for liquidity easing have been postponed.
· Strong dollar brings pressure: after the decision was announced, the dollar index strengthened significantly. A strong dollar usually puts pressure on risk assets like Bitcoin, which are priced in dollars.
2. Market sentiment and historical patterns: be wary of volatility
· Historical correction risk: data shows that in the eight FOMC meetings of 2025, Bitcoin experienced significant corrections after seven of them. After the last meeting, Bitcoin fell by about 9%.
· High volatility environment: FOMC meeting weeks are usually accompanied by high volatility and downside risk in cryptocurrency assets. Even if the market is optimistic before the meeting, the reaction after the decision is often negative.
Today's cryptocurrency market trend analysis
In summary, today's cryptocurrency market trend may exhibit the following characteristics:
1. Main negative factors
· Monetary policy is less accommodative than expected: the hawkish decision has dampened market optimism for rapid interest rate cuts in the first half of the year, which is the main macro negative factor.
· Technical and funding pressures: before the decision, the total market value of the cryptocurrency market had fallen below $3 trillion, and Bitcoin briefly dropped to around $86,000. The U.S. spot Bitcoin ETF has also seen significant fund outflows recently.
2. Potential support factors
· Possibility of 'sell the expectation, buy the fact': after the negative news is confirmed, if the market interprets it as fully priced in, a short-term rebound may occur. However, given the hawkish nature of this signal, the strength of the rebound may be limited.
· Oversold technical indicators: some analysts pointed out that certain daily indicators for Bitcoin are in the 'extremely oversold' area, which may attract some bottom-fishing funds.
· Long-term narrative unchanged: the possibility of Fed rate hikes has been ruled out, and the medium to long-term direction of easing has not fundamentally reversed. The trend of institutions adopting cryptocurrencies is also considered to have 'passed an irreversible critical point.'
3. Comprehensive judgment
Today's market will likely digest the effects of the hawkish decision, and the trend may be weak or show a downward fluctuation, with a focus on whether Bitcoin can hold its key support level (around the previous low of $86,000). Market volatility will significantly increase.
Main risks: be wary of concentrated sell-offs in the market due to unmet expectations. Historical data shows a higher probability of a correction after meetings.
Key observation points:
· Bitcoin price: whether it can stabilize above the key support level (like $86,000).
· Dollar index (DXY): if the dollar continues to strengthen, pressure on the cryptocurrency market will increase.
· Altcoin performance: altcoins usually exhibit greater volatility when the market weakens.
Summary and recommendations
1. Short-term caution: the Fed's 'hawkish pause' has changed the short-term macro atmosphere, and the market may need time to digest. It is advisable to reduce risk exposure and avoid high-leverage operations.
2. Focus on structure: if the overall market is under pressure, pay attention to relatively strong mainstream coins, or wait for market sentiment to stabilize before making judgments.
3. Medium to long-term perspective: this meeting did not change the overarching direction that interest rates have peaked and will eventually be cut. The current volatility may provide better positioning opportunities for long-term investors.