Shattered Rate Cut Dreams Yet Price Surges? Analyzing Bitcoin’s 3 Major Supports Under the Hawkish Shadow
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The Federal Reserve is expected to keep interest rates unchanged at its January meeting, with a 97.2% probability of a pause. Despite this, Bitcoin prices may still rise due to underlying bullish technical structures and the potential for increased volatility, which is seen as a catalyst for upward momentum. A weakening U.S. dollar, potentially influenced by U.S. government policy, is also a key factor supporting a rally in Bitcoin. Investors remain cautious pending a clear market trend, but the asset has maintained support above $80,000, suggesting potential for a recovery.
TradingKey - Fed rate cut in January unlikely, but Bitcoin prices may still rise.
On Wednesday (January 28), Bitcoin price (BTC) remained hovering below $90,000, currently priced at $88,920. It is evident that ahead of the Federal Reserve's interest rate decision, a strong "wait-and-see" sentiment prevails in the crypto market as investors await Bitcoin price to show a clear upward or downward trend.
Bitcoin price chart, source: CoinMarketCap
At 1:00-2:00 PM ET on Wednesday (2:00-3:00 AM Thursday Beijing time), the Federal Reserve will hold its first interest rate meeting of 2026, with the market generally expecting rates to remain unchanged. According to the latest data from the CME FedWatch Tool, the probability of the Fed pausing rate cuts is as high as 97.2%, while the possibility of a further 25-basis-point cut is only 2.8%.
Market expectations for the Fed rate decision, source: CME
While a rate cut by the Fed this time is unlikely, U.S. President Trump has expressed a desire for lower interest rates. From the perspective of Fed independence, Trump's wishes may not be fulfilled; however, Fed Chair Jerome Powell could face threats from Trump regarding the announcement of a new chair nominee. The conflict is not just personal but represents a clash between the Federal Reserve and the U.S. government, which will undoubtedly exacerbate Bitcoin price volatility.
According to Bitwise advisor Jeff Park, Bitcoin's price volatility is actually key to its upside. On January 28, Jeff Park posted on social media, stating, "It is almost impossible for Bitcoin to find upward momentum without experiencing significantly higher volatility."
Another important support point is that the bullish technical structure remains intact. Currently, expectations for the Fed to hold rates steady are bearish for Bitcoin; however, the decline over the past two weeks has not resulted in new lows, staying consistently above the November 2025 low of $80,000, which lays the groundwork for a bullish counterattack. Conversely, if it breaks below the previous low, panic selling will likely ensue, making a subsequent recovery extremely difficult.
Bitcoin price chart, source: TradingView
Most importantly, a weakening U.S. dollar helps push Bitcoin prices higher. Regarding this, Fundstrat co-founder and BitMine ( BMNR) Chairman Tom Lee previously stated that a weakening dollar will soon drive a significant rally in global risk assets. Coincidentally, Trump hinted this Tuesday that the dollar's exchange rate could be manipulated to fluctuate like a yo-yo, causing the U.S. Dollar Index (DXY) to plunge to 95.51 intraday, hitting its lowest level since 2022.
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
