Bitcoin Price Prediction: The BTC Fear and Greed Index is at 62, ending Powell's "hawkish" remarks with a brief panic.

The Federal Open Market Committee (FOMC) decided on Wednesday to maintain interest rates unchanged, in line with market expectations. The U.S. stock market slightly fell, and Bitcoin (BTC) briefly dropped below the $116,000 mark, but today (31st) during the Asian session, it recovered the $118,000 level. As Powell tightens monetary policy, top alts like Ether (ETH), Ripple (XRP), and Solana (SOL) are facing fluctuations. However, despite the once tense market sentiment, Bitcoin’s Fear and Greed Index shows that the market has moved past the brief panic caused by Powell’s hawkish remarks.

Powell waits and evaluates Trump’s tariff war

Due to the inflation rate still being above the target level, the market generally expects the Federal Reserve to maintain the interest rate unchanged at 4.25% to 4.50% for the fifth consecutive time. Federal Open Market Committee Chairman Powell made strong statements regarding inflation concerns triggered by tariffs.

On Wednesday, US President Trump announced a 25% tariff on India, a 15% tariff on Japan and the EU, and a 30% tariff on China. Powell stated, “The increase in tariffs is pushing up prices,” which raises the possibility of rising inflation.

Powell stated that rising inflation typically leads to interest rate hikes to curb demand, “the Federal Reserve is addressing inflation by not raising interest rates.” However, as countries around the world impose tariffs leading to price increases, the Fed’s hawkish stance on interest rate hikes has exacerbated overall market volatility.

Bitcoin remains stable under unchanged Interest Rate

Affected by the unchanged interest rate and Powell’s comments on interest rate hikes, rising prices, and tariffs, Bitcoin briefly fell below $116,000 on Wednesday. Normally, interest rate cuts support market demand by facilitating borrowing and stimulate investors’ risk appetite for risk assets like Bitcoin.

However, the decision to maintain stable interest rates, along with tough rhetoric, triggered a brief panic, ultimately leading to a pullback in Bitcoin prices. If interest rates rise, the difficulty of borrowing increases, which may reduce demand for Bitcoin.

Prior to this, BTC and top altcoins such as ETH, XRP, and SOL remained stable and rebounded from a brief pullback on Wednesday. Ethereum rose over 1% as of Thursday’s publication after forming a doji on Wednesday. Ripple and Solana rebounded nearly 2% at the time of writing, erasing declines of 1% and 2% from the previous day, respectively.

Fear and Greed Index: Remains in the “Greed” Zone

(Source: CoinMarketCap)

Despite the increasing volatility of alts, the overall market sentiment still points to a bullish trend. The Fear and Greed Index from CoinMarketCap shows a value of 62 in the “Greed” or bullish zone, indicating that investor sentiment is high and unaffected by the unchanged interest rate and hawkish statements. This suggests that the market has digested Powell’s “hawkish” remarks and remains optimistic about the long-term prospects of cryptocurrencies.

Conclusion:

Bitcoin has shown remarkable resilience under the pressure of the Federal Reserve maintaining interest rates and Powell’s “hawkish” remarks, quickly rebounding and stabilizing. The performance of the Fear and Greed Index further confirms the market’s long-term bullish sentiment towards cryptocurrencies. This indicates that despite macroeconomic and political factors causing short-term fluctuations, the intrinsic driving force of the cryptocurrency market remains strong.