Bitcoin (BTC) price surged above $94,000 on Tuesday, a day before the Federal Open Market Committee (FOMC) interest rate decision, and history suggests that traders should brace for volatility. Throughout 2025, BTC’s performance around FOMC meetings revealed that macroeconomic expectations are often priced in, and this front-running by traders can overshadow the actual impact of the policy decision itself.
Key takeaways:
- •Bitcoin has historically sold off after most FOMC events, including during rate-cut cycles.
- •BTC’s biggest inflows and leverage built up before FOMC events, thinning spot liquidity, and amplifying price volatility after the Fed decision.
FOMC Outcomes Highlight a Unique Bitcoin Price Pattern
Bitcoin’s reactions to the seven FOMC decisions in 2025 revealed a pattern of anticipatory pricing followed by inconsistent, often negative, post-event moves. Here is how BTC reacted over the seven-day window after each meeting:
- •Jan. 29 — No change: -4.58%
- •March 19 — No change: +5.11%
- •May 7 — No change: +6.92%
- •June 18 — No change: +1.48%
- •July 30 — No change: -3.15%
- •Sept. 17 — Cut 25 bps: -6.90%
- •Oct. 29 — Cut 25 bps: -8.00%
Seven-day BTC returns after each meeting ranged from +6.9% to –8%, with interest rate-cut meetings delivering the weakest performance. That divergence became clearer when viewed through market structure rather than macroeconomic headlines. These outcomes pointed to a set of consistent structural drivers behind BTC’s reactions:
Structural Drivers of Bitcoin's FOMC Reactions
1. Positioning dictated outcomes:
Before multiple meetings, most notably July, September, and October, funding rates and open interest rose sharply, indicating an overleveraged market. As illustrated in the chart, new-money (one-day to one-month) profit realized peaked in May, July, and September, which also marked the recent BTC peak.
Much of the “dovish upside” was already embedded in the price, leaving BTC with limited marginal buying power once the FOMC announcement was made.
2. Rate cuts produced the largest drawdowns:
The September and Oct. 25 BPS cuts were followed by –6.9% and –8% seven-day decline. The easing cycle was already priced in through pre-FOMC inflows and aggressive long positioning, creating vulnerability rather than support when the cut became official.
3. Priced in movement signaled fragility, not stability:
When policy outcomes became near-certain, volatility compressed ahead of the meeting and expanded immediately afterward as traders used confirmed news to reduce exposure, creating predictable short-term dislocations. Crypto analyst Ardi expected a similar outcome, stating:
History will be on the side of gravity tomorrow. If we repeat the average drop (~8%), Bitcoin is due to revisit the $88k line of defence before any continuation up.
— Ardi (@ArdiNSC) December 17, 2025
Overall, the data showed FOMC events acted less as directional catalysts and more as reset points where overstretched positioning may unwind, even if the interest rate outcome was dovish.
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