Bitcoin Faces Pressure After Hawkish Fed Hold; PCE Data Looms

Bitcoin faces renewed downside risk after the Federal Reserve held interest rates at 3.75%–4% but maintained a hawkish stance on inflation. The decision was approved 10–2, with Governor Lisa Cook and Cleveland Fed President Beth Hammack voting for a quarter-point increase. Fed Chair Kevin Warsh said inflation has remained above the central bank’s 2% target for close to six years.

Although the rate hold was widely expected, investors were less prepared for the Fed’s messaging. “Markets had the hold priced, but not the hawkish tone,” said Iggy Ioppe, chief investment officer at tokenization platform Theo. CME FedWatch data showed a 78.4% probability of a quarter-point hike at the Fed’s December 8–9 meeting and a 67.3% chance of at least a quarter-point increase by March.

Higher rates could limit demand for riskier assets, including Bitcoin, by making a nearly 4% risk-free return more attractive. However, Bitget analyst Lewis Huang said Bitcoin’s next move may depend more heavily on Treasury yields, the US dollar and broader market sentiment than on the rate decision itself. The personal consumption expenditures inflation report due Thursday is now a key catalyst for traders.

Fabian Dori, chief investment officer at Sygnum Bank, also expects volatility over the next few days as investors assess inflation and earnings from major technology companies. Results from Magnificent Seven firms could indicate whether rising AI capital expenditure is translating into revenue, potentially influencing risk appetite and Bitcoin’s price direction.