Powell's Press Conference This Week: The Real Key to Bitcoin and Dollar Movements

When the Federal Reserve is about to announce their interest rate decision, almost everyone already knows the outcome: interest rates will remain stable. However, cryptocurrency traders and traditional markets are actually not waiting for that decision itself. What they anticipate is the post-meeting press conference with Chair Jerome Powell—a session that could dramatically change the market’s direction.

Fed Interest Rates Likely Stable, But Powell’s Signals in the Press Conference Are Much More Important

After three consecutive quarter-point rate cuts, the central bank is expected to hold policy steady this week. Data from CME FedWatch shows a 96% chance that the Fed will keep interest rates in the 3.5%-3.75% range. This conclusion aligns with Powell’s statement last December, which hinted that the committee would not make additional cuts until 2026.

However, the decision to hold off on rate cuts is not the main story. Market observers and traders are more focused on what Powell will say during the press conference. His explanation of the reasons for maintaining the status quo in monetary policy could provide valuable signals about where the market will head in the coming months—especially for risk assets like bitcoin.

Dovish vs Hawkish: How Powell’s Explanation in the Press Conference Will Shape the Direction of Risk Assets

A critical question for traders is whether the pause in rate cuts will be interpreted as a hawkish or dovish signal. Both scenarios carry different implications for the market.

If Powell’s press conference shows a hawkish tone—such as emphasizing ongoing inflation risks—this could lower expectations for future rate cuts, subsequently pressuring risk assets including bitcoin to lower levels. Conversely, a dovish signal in the press conference would suggest that the pause is temporary and that easing policy remains a real possibility in the coming months, potentially driving bitcoin and stocks higher.

Morgan Stanley expects Powell to send a dovish signal. Their analysts anticipate the Fed will retain language in the policy statement mentioning “considering the range and timing for further adjustments”—language that hints easing is still on the table. Meanwhile, Stephen Miran, a Trump appointee to that position, is expected to argue for more significant cuts, which could reinforce dovish sentiment if opposition increases.

Trump Issues, Inflation, and Fed Independence: Key Questions Powell Will Face in the Press Conference

Powell’s press conference will not only address interest rates. The Fed Chair is likely to face challenging questions about Trump’s initiatives to increase housing affordability—a move that could boost inflation in the short term. Trump recently announced plans to purchase $200 billion worth of mortgage securities and issued an executive order banning large institutional investors from buying single-family homes.

Allianz Investment Management believes that the $200 billion purchase risks pushing demand forward and raising prices, although the impact of the investor ban may be limited. The questions Powell will face include how these policies will affect the inflation environment and whether the Fed will need to adjust its monetary strategy.

Additionally, Powell may be asked about the DOJ investigation targeting him personally (which he calls political retaliation), and expectations regarding Trump’s tariffs, which already factor in delayed inflation impacts this year.

Bitcoin Momentum: Critical Resistance Levels and the Impact of the Press Conference

Ahead of the Fed’s press conference, on-chain data shows important technical conditions for bitcoin. About 63% of the currently invested bitcoin wealth has a cost basis above $88,000, creating a significant resistance zone. Further analysis reveals a high concentration of supply between $85,000 and $90,000, combined with thin support below $80,000.

The implications of Powell’s press conference will be crucial in determining whether bitcoin can break through this resistance or be pushed downward. If Powell signals a strong dovish stance, the likelihood of bitcoin continuing its bullish momentum increases. Conversely, a hawkish sentiment will prompt traders to sell risk assets, testing lower support levels. The dollar will also react to the tone of the press conference—explanations emphasizing economic stability and delaying easing could strengthen the US dollar, potentially weakening dollar-denominated assets like bitcoin. ING notes that given the strong performance of the US asset markets currently, Powell will find it difficult to argue that financial conditions are restrictive. This could strengthen the dollar against low-yield currencies like yen and euro, creating headwinds for bitcoin’s rise.