Bitcoin Holds Steady Ahead of Fed and White House Policy Update

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Bitcoin continued trading in a narrow range on Tuesday as traders exercised caution ahead of key economic announcements from the United States. The cryptocurrency hovered between $117,000 and $120,000, with technical indicators suggesting that a range expansion may soon follow.

Analysts attribute the recent price weakness to “derisking” ahead of Wednesday’s Federal Open Market Committee (FOMC) interest rate decision and an anticipated policy update from the White House on digital assets. Both events are considered crucial for near-term market direction.

According to technical analysis, Bitcoin’s Bollinger Bands have compressed significantly, often a precursor to heightened volatility. Some analysts believe Bitcoin may retest support levels as low as $114,000, though others point to potential upside if economic signals align with market expectations.

White House Crypto Policy Report in Focus
A long-awaited White House report on U.S. cryptocurrency policy is expected to clarify the government’s position on Bitcoin and possibly disclose the quantity of Bitcoin currently held in U.S. reserves. There is also speculation that President Trump may support the development of an official strategic Bitcoin reserve. While not confirmed, such a move could serve as a strong signal of institutional adoption.

Federal Reserve Maintains Cautious Approach
Federal Reserve Chair Jerome Powell is scheduled to speak after the FOMC announces its decision. Current market sentiment, as tracked by CME Group’s FedWatch tool, shows a 98% probability that the Fed will keep interest rates unchanged at 4.25% to 4.5%. Despite calls from President Trump for immediate rate cuts, Powell is expected to maintain a data-driven stance, signaling flexibility in either direction.

The timing of this announcement coincides with several important quarterly earnings reports from major U.S. companies including Meta Platforms, Ford, Robinhood, and Microsoft. Key economic indicators such as GDP, Nonfarm Payrolls, the Purchasing Managers’ Index (PMI), and the ISM reports on services and manufacturing will also be released.

Market Activity Reflects Cautious Sentiment
Trading data shows a reduction in exposure among Bitcoin futures traders. Open interest in Bitcoin fell from $50.58 billion to $49.58 billion during Tuesday’s session, according to data from TRDR. Additionally, futures liquidations intensified, with $173.8 million in long positions closed out within 12 hours, based on figures from CoinGlass.

Despite the subdued activity, volatility compression in Bitcoin’s daily range down nearly 45% in the past three weeks indicates a likely breakout. Should the Fed’s tone remain neutral and the White House release favorable crypto policy news, an upward price movement could follow.