Fed Rate Decision: How It Could Affect Bitcoin, Ethereum, XRP Prices

Investors are bracing for the Fed Rate decision, due this afternoon, as digital assets extend a week-long slide.

Bitcoin, Ethereum, and XRP each fell on Wednesday, weighed down by the U.S. Senate's failure to advance the Clarity Act (H.R. 3633).

A cloture vote fell short of the 60 votes required, drawing just 49 in favor, dealing a setback to hopes for clearer federal rules on digital assets.

The result added to pressure from expectations of tighter Fed policy, leaving crypto regulation in Washington stalled once again.

The outcome of the Fed Rate call, set for release at 2:00 PM ET, is likely to set the tone for digital-asset trading into the end of the week.

Bitcoin, Ether, XRP Fall Ahead of Fed Decision

Bitcoin traded 1.41% lower at $75,845.50, putting its market capitalization at $1.52 trillion. The token has declined more than 4% over the past seven days.

Ethereum, the second-largest cryptocurrency by market value, fell 3.00% to about $2,400. XRP was the session's worst performer among major tokens, down 8.06%.

Solana slipped 3.53%, and Dogecoin declined 3.45%, reflecting broad-based selling across the sector.

The move lower coincided with a setback in Congress. The Senate failed to advance the Clarity Act, legislation that would have established clearer federal rules for digital assets, denying the market a catalyst it had been counting on.

What the Fed Is Expected to Do Today

The Federal Open Market Committee is scheduled to announce its rate decision at 2:00 PM ET, with Fed Chairman Kevin Warsh set to hold a press conference at 2:30 PM ET.

Inflation remains well above the central bank's 2% long-run target, a backdrop that has pushed markets to price in tighter policy this week. 

According to the CME FedWatch tool, futures markets assign a 92.5% probability to a 25-basis-point rate increase, versus a 7.5% probability that rates hold steady.

The data support that view. The personal consumption expenditures index, the Fed's preferred inflation gauge, rose 3.7% on an annual basis in July, with the core measure up 3.3%. The consumer price index climbed 3.4% annually in August, with core CPI at 2.4%.

Those readings have reinforced a hawkish tilt among policymakers, even as investors hold out hope for a pause.

Three Scenarios: How a Hike, a Hold or a Cut Could Move Crypto

Strategists are framing the outcome in three scenarios:

• A rate hike would likely pressure Bitcoin, Ethereum, and XRP further.

• A hold could offer markets relief and support a near-term rebound.

• A rate cut, seen as the least likely outcome, would probably fuel a sharper rally.

With futures markets heavily favoring a hike, a surprise cut appears improbable. Still, positioning can shift quickly once the decision is announced.

Why Some Traders Are Betting on a Surprise Hold

Some analysts see a case for the Fed holding rates steady, despite odds that currently favor a hike near 93%.

Political considerations ahead of the November midterms are part of that argument. An additional rate increase could add strain to the economy at a delicate moment, a factor some believe could influence the committee's calculus.

If the Fed hold instead of hike, the divergence from consensus could prompt rapid repositioning among traders, a dynamic that has historically supported sharp, short-term price swings.

Bitcoin has advanced following only two of the last 14 FOMC decisions. Even so, some traders see scope for a move from the $75,000 area toward $82,000 if a hold materializes. That outcome remains speculative, not a forecast.

XRP Tests Key Support as Traders Eye the $1.00 Level

XRP is testing its 20-week exponential moving average, a technical marker closely followed by chart analysts. A close below that line could open a path toward the $1.00 level.

The token slid to $1.26 after losing support at $1.34, undermining an earlier bullish setup that had targeted the $1.70 to $1.78 range.

The token's 1-hour relative strength index has fallen to about 21, a deeply oversold reading that leaves room for a short-term bounce even if the broader trend stays weak.

Analysts following this XRP price prediction caution that a bounce alone would not confirm a trend reversal. Reclaiming $1.34 remains the level to watch before sentiment turns more constructive.

Ether Consolidates Below Resistance Near $2,600

Ethereum has consolidated after rallying from roughly $1,900 to $2,550, and now trades near $2,399.

Resistance in the $2,550 to $2,600 range is the key technical barrier. A sustained break above it could open the way toward $2,752, with a longer-term measured target near $3,350 to $3,400.

On the downside, $2,150 marks a significant support level; a decisive break below it would undermine the bullish case.

With the relative strength index near a neutral 50, analysts say confirmation from a high-volume breakout would be needed before the upside scenario gains credibility.

Bitcoin's Cost-Basis Data Points to a Possible Buying Zone

Analyst Ali Martinez has highlighted Bitcoin's short-term holder cost basis, the average acquisition price for investors holding the asset for less than 155 days, as a level worth monitoring. That figure currently sits near $71,200.

Martinez notes that prior pullbacks to this level have historically marked favorable accumulation zones ahead of broader market recoveries.

Separately, trader Michaël van de Poppe said he is watching the $74,000 area as his preferred support zone, adding that fear has returned to the market alongside a wave of short liquidations.

What to Watch After the Fed's Announcement

Digital-asset markets are navigating two overlapping developments: the stalled Clarity Act vote and today's Fed Rate decision.

A hold by the Federal Reserve could ease some of the week's losses. If XRP fails to defend the $1.24 to $1.26 zone, however, a decline toward $1.10 and then $1.00 remains a possibility.

Traders expect the sharpest price action across Bitcoin, Ethereum, and XRP to unfold in the hours following the 2:00 PM ET announcement, with Warsh's 2:30 PM ET press conference likely to shape sentiment well beyond the session.

Disclaimer

This article is for informational purposes only and should not be treated as financial or investment advice. Cryptocurrency markets are highly volatile, and prices can rise or fall sharply within short periods. Always do your own research and consult a licensed financial advisor before making any investment decisions.