Bitcoin Price Forecast: BTC steadies above key support as Fed rate decision looms

Bitcoin (BTC) edges slightly higher, trading around $64,400 at the time of writing on Wednesday, after finding support near a key technical level in the previous day. However, the recovery remains fragile, as persistent outflows from BTC spot Exchange Traded Funds (ETFs) and renewed geopolitical tensions continue to weigh on sentiment. Traders now remain focused on the US Federal Reserve (Fed) interest rate decision and its policy stance on Wednesday, which could play a key role in shaping the next directional move for the Crypto King.

US-Iran renewed tensions dampen risk appetite 

In the latest developments surrounding the Middle East crisis, Iran's Islamic Revolutionary Guard Corps (IRGC) launched a surprise attack and targeted US forces in the Middle East with multiple ballistic missiles late Tuesday. 

All Iranian missiles were successfully intercepted, the US Central Command (Centcom) said in a post on X, and added that US forces remain vigilant and at a high state of readiness. 

In a subsequent statement, Centcom said that the US and Saudi forces struck multiple terrorist logistics and weapons sites in eastern Iraq, retaliating against more than 30 drone attacks in the past three days by Iran-aligned terrorists.

These renewed attacks keep the geopolitical risk premium in play, adding concerns about significant disruptions to global energy supplies. Such developments have triggered a sharp recovery in crude Oil prices, reviving inflation fears and dampening risk appetite, capping BTC upside potential.

Traders await the Fed interest rate decision 

Market participants now await the Fed’s rate decision on Wednesday, which could bring fresh impetus for risky assets such as BTC.

According to the CME FedWatch tool, the market is unusually divided, with implied probabilities assigning a 70.6% chance of rates remaining unchanged in the 3.50%-3.75% range and a 29.4% chance of a 25 basis points rate hike.

Following new Fed Chair Kevin Warsh’s shift away from forward guidance, markets appear to be entering Federal Open Market Committee (FOMC) meetings with greater uncertainty around policy outcomes. The split in rate expectations reflects similarly divided views on inflation. 

Inflation cooled in June after reaccelerating in April and May, supporting the case for unchanged rates. However, upside inflation risks remain elevated amid higher Oil prices, continued disruptions in the Strait of Hormuz, and renewed tariff proposals from US President Donald Trump. 

In an exclusive interview with Lacie Zhang, Research Analyst at Bitget Wallet, told FXStreet, “The base case is still that the Fed holds rates unchanged, but the sharp repricing of a possible hike makes this meeting more consequential than a routine pause. The key question for onchain markets is whether the Fed validates expectations of renewed tightening, particularly at the September meeting, or pushes back against them.”

Zhang continued, "A hawkish hold or a surprise hike would likely keep capital concentrated in Bitcoin, stablecoins and tokenized Treasury or other dollar-yield strategies. It could also trigger further deleveraging in ETH, altcoins and memecoins as the dollar and Treasury yields rise. A more balanced message, especially one suggesting that the recent oil-driven inflation shock does not yet justify additional tightening, could unwind some of that positioning and support a gradual rotation back into higher-beta onchain assets over the following weeks."

“Bitcoin's price alone may be misleading because it can rise while liquidity remains concentrated in a single defensive asset. I would watch stablecoin supply and exchange balances to determine whether fresh dollar liquidity is entering crypto; ETH/BTC and Bitcoin dominance to see whether risk appetite is broadening beyond Bitcoin; and perpetual open interest, funding rates and DeFi borrowing activity to assess whether leverage is rebuilding. Cross-chain stablecoin flows and DEX volumes would provide an additional signal of whether capital is actually moving back onchain, rather than simply rotating between assets on centralized exchanges.”, the analyst added.

Institutional demand continues to weaken

Institutional demand continues to weaken so far this week. SoSoValue data shows that US-listed spot BTC ETFs recorded outflows of $49.75 million on Tuesday, marking four consecutive days of withdrawals. If these outflows continue and intensify through the week, BTC could extend its correction.

Bitcoin technical outlook: BTC holds the $64,000 support

Bitcoin price trades around $64,400 at the time of writing on Wednesday, maintaining a bearish near-term bias as it holds below the 50-day, 100-day and 200-day Exponential Moving Averages (EMAs), with the nearest EMA cap emerging around $64,967. The Relative Strength Index (RSI) hovers just above 50 on the daily chart, hinting at neutral-to-slightly constructive momentum, but the Moving Average Convergence Divergence (MACD) has slipped deeper into negative territory, suggesting that upside attempts remain vulnerable while the pair trades under these EMAs.

On the topside, initial resistance is seen at the 50-day EMA around $64,967, followed by the 100-day EMA near $67,621 and the 200-day EMA close to $73,665, before a more distant horizontal cap at $84,410 comes into play. 

On the downside, immediate support aligns with the previously plotted horizontal level around $64,004, and a clear break below this floor would expose BTC toward the yearly low of $57,800, set on July 1.

(The technical analysis of this story was written with the help of an AI tool. Know more.)