Understanding Bitcoin's Price Action Around FOMC Decisions

As Bitcoin (BTC) soared past $94,000 on Tuesday, just one day before the Federal Open Market Committee (FOMC) announced its interest rate decision, traders should prepare for possible market fluctuations. The events surrounding FOMC meetings in 2025 indicate that traders tend to price in macroeconomic expectations ahead of time, which can overshadow the actual effects of the policy outcomes.

Key Takeaways

Historically, Bitcoin has experienced price drops after most FOMC meetings, even during periods of rate cuts.
The largest inflows and leverage for BTC generally occur before FOMC meetings, which reduces liquidity in the spot market and increases price volatility after the Fed's decision.

Bitcoin's historical pattern shows that it frequently declines following FOMC events, even during rate-cut cycles. Specifically, the largest inflows and elevated leverage occur in advance of these events, leading to decreased spot liquidity and increased price fluctuations post-announcement.

FOMC Decisions Reveal Distinct Bitcoin Price Trends

Bitcoin's behavior following the seven FOMC decisions in 2025 demonstrates a trend of anticipatory pricing followed by varied and often downward movements after each event. Here's a breakdown of Bitcoin's reactions over the week following each FOMC meeting:

Jan. 29 — No change: -4.58%
March 19 — No change: +5.11%
May 7 — No change: +6.92%
June 18 — No change: +1.48%
July 30 — No change: -3.15%
Sept. 17 — Cut 25 bps: -6.90%
Oct. 29 — Cut 25 bps: -8.00%

Bitcoin seven-day price outcome post FOMC event in 2025. Source: Cointelegraph/TradingView

The seven-day returns for BTC varied from +6.9% to -8%, with the weakest performance linked to interest rate cuts. This difference in outcomes is better understood when examining market structure rather than just macroeconomic news. Several consistent structural factors influenced Bitcoin's reactions:

Positioning Guided Price Outcomes: Prior to several meetings—particularly in July, September, and October—traders saw a sharp increase in funding rates and open interest. This signaled an over-leveraged market, as evident from the peak profit realization of new capital in May, July, and September, which coincided with Bitcoin's recent highs.

Much of the anticipated positive news was already reflected in the price, leaving limited room for further buying once the FOMC announcement occurred.
Rate Cuts Led to Significant Drawdowns: The expected cuts in September and October were followed by declines of -6.9% and -8%, respectively. These reductions were anticipated through pre-FOMC inflows and aggressive bullish positions, resulting in market vulnerability instead of support when the cuts were announced.
Pricing Signals Indicated Market Fragility: As the policy outcomes became more predictable, volatility decreased prior to the meetings but spiked immediately afterward. Traders reacted to confirmed outcomes by adjusting their exposure, leading to predictable short-term market disruptions. Analyst Ardi noted a similar pattern emerging, indicating that FOMC events tend to act more as reset points for over-leveraged positions than as clear market direction indicators.

Related: Key Bitcoin price levels to watch ahead of 2025’s last FOMC meeting