TrumpRegulation
|3 min ReadFed cut decision: will Bitcoin break out next?
Maya Chen
Senior Analyst
Published
Jan 16, 2026
The pivot everyone’s waiting for
This week is the test. The Federal Reserve meets for the biggest call of 2025. A cut would lower the cost of money. That pushes investors out of cash and into risk. Bitcoin sits in that slipstream.
The update landed five hours ago. Odds are heavy. The CME FedWatch tool puts a 96 percent chance on a 0.25 point cut. Many say it is priced in. Maybe. But momentum often follows the press conference, not the headline.
Powell’s mic matters
Chair Jerome Powell will speak after the decision. His tone sets the path into year-end. If he hints at more cuts, risk turns up. If he leans cautious, stocks and crypto may pause. Some want a bigger 0.5 point move. Most call it unlikely. One person will not be pleased either way. Donald Trump has slammed the pace, called Powell “Too Late,” and pushed for faster cuts. He will be in the U.K. for a state visit when the news hits.
The tape and the tell
Wall Street is already strong. The S&P 500 hit intraday records on Monday. Tesla caught a bid after Elon Musk bought 1 billion of stock. Bitcoin turned higher after weeks of chop. Watch 118,595.78. That is the 30-day peak. Clear it and bulls reach for the all-time high above 124,457.12. Ether pulled back after its own record at 4,953.73 on August 24. Looser policy could be the push it needs to crack $5,000.
Some warn the market is hot. The S&P 500 is up 72 percent since the start of 2023. AI and earnings did the lifting. Crypto moved even faster. Bitcoin rose about 600 percent in two and a half years. ETH gained 275 percent. XRP jumped more than 780 percent. If stocks pull back, crypto will feel it.
Skeptics also ask why cut now. Inflation still sits above the Fed’s 2 percent target. JPMorgan strategist David Kelly pointed to tariff pressure and wrote: “By the fourth quarter of this year, inflation could be 1.2 percentage points above the Fed’s target and rising, while unemployment would be just 0.3 percentage points above their target and stable. If this is the outlook, why should the Fed cut at all?”
Here is the move. Respect the levels. Listen for Powell’s guide. If the cut comes and the tone is easy, Bitcoin can run. If the tone is tight, expect a shakeout. Either way, the door opens this week. Act with intent or watch the tape leave without you.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.