By the morning of Monday, March 17, the Federal Open Market Committee was already in its first session of a two-day meeting in Washington that will produce a rate decision at 2:00 PM EST on Wednesday, March 18, and the crypto market’s relationship with that event is more nuanced this week than it has been at any point since the current geopolitical crisis began on February 27.
Bitcoin entered the FOMC week having gained approximately 9.7% in the prior seven days, a figure that sounds strong but actually understates the broader story because altcoins outperformed considerably, with Ethereum up 7.6% on a single-day basis earlier in the week and Solana posting a 2.3 percentage point outperformance over Bitcoin on a weekly basis — a rotation pattern that signals genuine risk appetite rather than Bitcoin-only defensive positioning.
The catalyst that shifted sentiment was developments around the Strait of Hormuz, the waterway whose closure since the Iran conflict began had been keeping oil near $100 to $105 per barrel and anchoring inflation expectations in a way that made it very difficult for the Federal Reserve to signal any easing path credibly.
Two tankers passed through the strait for the first time since the war began, and President Trump stated publicly that the United States was talking to Iran and deploying warships alongside other nations to keep the route open, a combination of developments that immediately reduced Brent crude from its elevated range and changed the inflation calculus ahead of Wednesday’s decision.
The rate decision itself carries virtually no suspense — market-implied probability of a hold at 3.50% to 3.75% sits around 94%, and no credible analyst is forecasting a cut at this meeting given that core PCE inflation remains around 2.8%, still above the Federal Reserve’s 2% target.
What matters is Jerome Powell’s press conference language, specifically whether the combination of softer oil prices and February’s relatively benign CPI print — 2.4% year-over-year with only a 0.2% monthly core gain — gives him enough cover to shift tone even marginally toward acknowledging that the path to easing has become shorter.
The historical pattern is not encouraging for anyone hoping Wednesday’s outcome alone will sustain the rally: Bitcoin declined after seven of eight FOMC meetings in 2025 regardless of the actual decision, and following January 2026’s hold it fell from $90,400 to $83,383 in the 48 hours that followed despite the outcome being universally anticipated in advance.
That “sell the news” dynamic has been persistent enough to become a positioning factor in its own right, with traders who understand the pattern either hedging into the decision or reducing long exposure before Powell finishes his opening remarks on Wednesday afternoon.
The structural underpinning that makes this week different from previous FOMC cycles is the institutional flow picture: spot Bitcoin ETFs have absorbed approximately $1.2 to $1.3 billion in net inflows during March so far, a pace that would make this the first positive month for flows since October 2025, and that accumulation has been happening while the Fear and Greed Index was sitting between 10 and 19 — readings that reflect deep retail pessimism rather than the speculative froth that typically accompanies Bitcoin rallies built on thinner foundations.
Open interest across the futures market rose 5% to $107.6 billion in the 24 hours through Monday, with Bitcoin’s open interest climbing to 687,200 BTC, the highest level since February 25, and Ethereum’s open interest reaching 13.72 million, the highest since January — rising open interest alongside rising prices indicating fresh capital entering rather than short covering, which gives the move a different and more durable character than the liquidation-driven squeezes of recent weeks.
Whether Powell says something on Wednesday that extends the rally or reverts to familiar language and triggers the pattern that has dominated the past twelve months will likely define whether the $74,000 resistance level Bitcoin has repeatedly approached becomes a ceiling or a launchpad for the remainder of the quarter.
