Bitcoin's price fell below $71,000 on Wednesday following the U.S. Federal Reserve's decision to hold interest rates steady, dashing market hopes for imminent rate cuts and reducing expectations for fresh liquidity. The Federal Open Market Committee (FOMC) voted 11-1 to maintain the federal funds rate in the 3.5%–3.75% range, with the sole dissent coming from Stephen Mira.
The Fed's stance was driven by persistent inflation risks and elevated oil prices, leading officials to raise their 2026 inflation forecast. They now project the Personal Consumption Expenditures (PCE) price index at 2.7% for both headline and core measures. The closely watched 'dot plot' of economic projections signaled only one potential rate cut in 2026 and another in 2027, a reduction from earlier market expectations for two cuts this year.
Despite the initial price drop, crypto trader sentiment quickly turned optimistic. Data from analytics platform Santiment showed a dramatic surge in bullish social media discussion following the announcement, with its social discussion score jumping from approximately 9 to 71 in the hours after the decision. "For now, traders are expecting a bullish relief rally in spite of no changes being made," Santiment noted, adding that bearish price action linked to the lack of a rate cut had likely been absorbed in the previous trading session.
On-chain metrics for Bitcoin remained relatively steady amidst the volatility. The Market Value to Realized Value (MVRV) ratio held at 1.3, while the Spent Output Profit Ratio (SOPR) was 0.999, indicating most spent outputs were near breakeven. The network also continued to see exchange outflows, suggesting accumulation.
Analysts are divided on the sustainability of any potential rally. Historical patterns show Bitcoin has declined after seven of the eight FOMC meetings in 2025, following a 'sell the news' trend. Furthermore, the Crypto Fear and Greed Index fell back into "Extreme Fear" territory on Wednesday, contrasting with the bullish social sentiment. The market is also weighing the impending leadership change at the Fed, with Chair Jerome Powell's term expiring in May 2026 and the more hawkish Kevin Warsh nominated as his successor.
