Bitcoin recovered to $75,000 amid increased risk appetite and de-escalation in the Middle East. However, further growth is constrained by a less visible but more important factor—the Fed’s stance and rate dynamics. The market received a positive external backdrop. Stocks are hitting new highs, oil is falling, and the crypto market is resuming growth. But within the macro environment, there remains a constraint that prevents BTC from entering a full-fledged trend.
The Rally Faces a ‘Silent Ceiling’
The main barrier right now is not in the news or in market sentiment. It is forming in the debt segment. Short-term rates do not indicate expectations of rapid easing. Two-year bonds continue to fluctuate within a wide range, reflecting uncertainty over Fed policy. This is an important signal. In the current cycle, bitcoin moves with global risk assets, meaning it depends on liquidity. As long as the market does not believe in rapid easing, growth remains limited.
The Fed Is in No Hurry to Change Course
At the last meeting, the regulator kept the rate in the 3.5–3.75% range. The rhetoric remained unchanged. Inflation is still above target levels. Decisions will depend on incoming data. This means there will be no quick changes. The Fed remains in wait-and-see mode. For the market, this is more important than any individual news. Liquidity is not increasing, so conditions remain tight.
The Market Needs Not the Fact of a Cut, but the Expectation
For bitcoin, the key point is not the rate cut itself. It is important for the market to start believing in easing conditions. Right now, this is happening only partially. Investors are willing to buy risk amid falling oil and easing geopolitics. But this is not enough. Without confirmation from rates, growth remains fragile. Bitcoin is participating in the rally, but not leading it.
Uncertainty Surrounding Fed Leadership
An additional factor is the change of the regulator’s head. Jerome Powell’s term as chair ends on May 15. Kevin Warsh is being considered as the main replacement candidate. His hearings are scheduled for April 21. However, the process is dragging on. Political risks and investigations are creating uncertainty around the appointment.
Scenario With Interim Leadership
Powell has already stated that he may remain as acting chair if the confirmation of the new head is delayed. This increases uncertainty. The market does not understand whether policy will change in the near future. As a result, the base scenario is to maintain the current course. Even if the change happens, the effect may be delayed.
Policy Remains the Same
Despite discussions, the current Fed composition continues to stick to a cautious line. At the last vote, only one participant supported a rate cut. The rest voted to keep it unchanged. This shows that there is no readiness for a sharp easing within the regulator. The market takes this into account.
Inflation and the Labor Market Leave No Room
The data remains mixed. Unemployment is holding around 4.3%, which is considered a stable level. Core inflation remains above target. Additional pressure comes from energy and transportation costs. This limits the Fed’s actions. Cutting rates in such conditions could increase inflation. That is why the regulator is not rushing.
Liquidity Is More Important Than the Rate
For the crypto market, it is not just the rate that matters. The key role is played by the liquidity balance. The Fed’s balance sheet remains at about $6.7 trillion. At the same time, the regulator continues operations with short-term bonds, maintaining a sufficient level of reserves. This is not full easing, but also not tightening. Rather, it is a stabilization mode. For markets, this is not enough to launch a new growth cycle.
Warsh May Change the Balance
The potential new Fed chair is associated with a tougher stance on the balance sheet. He criticized asset purchase programs and advocated for balance sheet reduction. This may be seen as a negative factor for liquidity in the short term. Even the expectation of such changes affects the market.
What Investors Are Watching Now
The nearest milestone is the April 21 hearings. The market will assess how ready the candidate is to continue current policy. Three questions are in focus. How will the Fed respond to inflation caused by rising costs? Is it possible to cut rates while reducing the balance sheet? And will the current cautious approach remain? The answers to these questions will shape expectations.
The Next Key Moment
After the hearings, attention will shift to the Fed meeting on April 28–29. If the leadership situation is not clarified by then, the market will rely on previous rhetoric. This means the wait-and-see mode will continue.
What This Means for Bitcoin
Bitcoin may continue to rise as sentiment improves. But without a change in the macro environment, the potential is limited. For sustainable growth, one thing is needed: the market must believe in easing conditions. So far, that has not happened.
What’s Next?
The coming weeks will be decisive. If rate expectations start to shift, bitcoin will get room to move higher. If not, the current level may remain the ceiling. The market is now in a transition phase. The news backdrop supports growth, but macro factors continue to restrain it. This contradiction is exactly what defines BTC’s behavior.
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