FOMC meetings don't set Bitcoin's direction, analyst says

The U.S. Federal Open Market Committee (FOMC) meeting acts more as a catalyst for clearing out excessive market positions than as a determinant of Bitcoin's direction, according to an analysis. XWIN Research Japan, a contributor to CryptoQuant, stated that while FOMC meetings consistently draw significant attention from the crypto market, historical data shows they rarely decide Bitcoin's medium-term trend. Instead, they have typically served as a trigger for market repositioning. The analysis noted that when interest rates were held steady last year, Bitcoin showed no clear directional movement. Conversely, when rates were cut between September and December, its price fell by 6% to 8%, a phenomenon attributed to pre-existing expectations turning into liquidations after the announcement. The contributor further explained that ahead of a meeting, the market often sees a period of temporary stability with rising leverage and open interest but falling liquidity and volatility. However, if no clear catalyst emerges post-meeting, position clearing tends to begin in earnest, causing sharp short-term price swings. Profit-taking is particularly rapid in the event of a rate cut. The core argument is that the FOMC does not set Bitcoin's trajectory but rather exposes and helps resolve over-leveraged positions. The analysis concluded that the key variables for Bitcoin's direction over the next 30 days will not be political rhetoric but rather leverage reduction, the easing of selling pressure, and the recovery of liquidity.