Every move by the Federal Reserve this year has been closely watched by the cryptocurrency market. From January to December, there have been three rate cuts, with the most recent on December 10th bringing the rate to 3.5% to 3.75%. It sounds like a significant cut, but in reality, these interest rates are still the highest since 2008.

Here's where it gets interesting — many people believe rate cuts will continue indefinitely, but according to forecasts, there may only be one more rate cut by 2026. Why? The trajectory of the labor market, whether inflation data can continue to decline, and the impact of tariffs are all key factors influencing the Fed's decisions.

Another important variable is that Federal Reserve Chair Jerome Powell's term expires in May. Who will be the new chair? President Donald Trump has already started looking for candidates, aiming to find someone with a more moderate stance. This could lead to new policy changes.

Next week, on January 27-28, the Federal Reserve will hold a meeting where policymakers will update their policy guidance — this is very important and could set the tone for the entire first quarter. Cryptocurrency market participants are all watching this step.