Bitcoin price saw a modest rebound earlier today as markets turned cautious ahead of the Federal Reserve’s interest rate decision due later in the day.
The total crypto market cap climbed nearly 3%, settling around $3.13 trillion after a choppy start to the week.
Market sentiment also improved slightly, with the crypto fear and greed index rising two points to 37, inching closer to neutral territory.
Most major altcoins were in recovery mode by late Asian trading hours, while a handful posted double-digit gains.
Why is Bitcoin price up today?
Bitcoin’s brief push back to $90,000 was supported by a combination of macroeconomic expectations and strategic positioning by traders ahead of several major catalysts on the horizon.
The most immediate driver is the US Federal Reserve’s policy announcement due later today.
Markets have largely priced in a pause in interest rates, with the CME FedWatch Tool showing a 97.2% probability that the Fed will hold steady.
The expectation of a rate hold has eased pressure on risk assets, giving Bitcoin and other digital tokens some room to recover as the cost of holding non-yielding assets temporarily declines.
But beneath the surface, seasoned traders are eyeing the historic trends.
Last year, Bitcoin proved to be a “sell the news” favourite, tanking after nearly every FOMC announcement regardless of the outcome.
Unless Jerome Powell delivers a surprisingly dovish masterclass at 2:30 PM ET, this recovery could be nothing more than a short-lived relief rally in a mid-January downtrend.
Elsewhere, the US dollar continued to weaken, touching its lowest level since early 2022, and the downturn accelerated after the Trump campaign signalled support for a weaker dollar strategy to improve US export competitiveness.
As the dollar index loses ground, flows have begun rotating into perceived stores of value.
Gold remains the primary beneficiary, having surged past $5,300 per ounce. But Bitcoin is starting to absorb some of that capital as well, buoyed by its appeal as a hedge against fiat currency erosion.
On-chain and treasury activity have also contributed to the rebound. Despite ongoing outflows from spot Bitcoin ETFs, new disclosures suggest select corporate buyers are stepping in.
American Bitcoin Treasury and SRx Health Solutions are among the firms that revealed fresh BTC purchases this week, treating the sub-$90,000 range as a strategic accumulation zone.
Adding to the optimism was the reintroduction of a Bitcoin Reserve bill in South Dakota, which has injected a dose of legislative momentum into the market narrative.
Analysts also noted that the weekend’s drop to $86,000 helped purge over-leveraged positions.
With excess leverage cleared out, the market structure has become cleaner, making it easier for prices to rebound on relatively lighter volume.
Still, the rally is not without risk. Some traders warn that this could turn into a dead-cat bounce, a short-term recovery that ultimately gives way to further downside.
With volatility remaining high and multiple catalysts still to come, the next few sessions may determine whether Bitcoin’s recovery can hold, or if today’s move was just a brief pause before the next leg lower.
Will Bitcoin price go up?
Whether Bitcoin’s bounce leads to a sustained market-wide recovery will depend on whether bulls can convincingly reclaim and hold the psychological $90,000 level.
So far, price action has struggled to maintain momentum above that threshold, failing to secure it as solid support.
There’s also a new geopolitical twist adding pressure to the mix.
US President Donald Trump issued a warning to Iran, stating that time was running out and urging the regime to come to the table for a nuclear deal.
His comments came as a large US naval presence moved into the Middle East, stoking fears of escalation.
Data from Polymarket shows rising trader concern, with odds of a US strike on Iran before the end of 2026 climbing to 75%.
The probability of such an event happening before March 31 now stands at 60%.
Historically, markets have not reacted kindly to Trump-led sabre-rattling. Bitcoin, often touted as a safe-haven asset, failed to live up to that narrative in past geopolitical flashpoints.
It dropped during episodes like Trump’s threat to take over Greenland and again when he proposed trade tariffs on NATO allies.
However, the rising tension has driven renewed demand for traditional safe-havens like Gold, which has drawn some of the liquidity from the crypto market including Bitcoin.
From a technical perspective, Bitcoin had slipped into oversold territory, which according to crypto analyst Crypto Caesar, could position it for a rebound.
“Bitcoin will bounce soon imo,” he wrote.
However more downside may be in play before any upside moves happen as concerns over institutional selling have emerged late in the day.
On-chain data flagged large transactions from wallets linked to BlackRock.
Arkham Intelligence logs show multiple deposits to Coinbase Prime wallets over the past hour, including four transfers of 300 BTC each and one of 256.87 BTC, totalling over $100 million.
There were also sizeable ETH deposits, including a single 10,000 ETH transaction worth over $30 million. See below.
Although transfers to Coinbase Prime don’t necessarily mean selling activity, some market watchers believe BlackRock could be liquidating some of its crypto holdings ahead of the Federal Reserve’s rate decision.
This selling activity was echoed in the Coinbase Bitcoin Premium Index, which measures the difference in BTC prices between Coinbase and other exchanges.
Analyst Ted Pillows shared a chart showing the premium had dropped sharply into negative territory, a signal that institutional sell pressure on US platforms continues to rise. See below.
Coinbase Bitcoin Premium keeps on getting worse.
Too much $BTC selling by institutions.
All eyes are now around $89,000, which has provided a strong floor throughout the day.
If Bitcoin price breaks below this, it could position the flagship crypto for a visit towards it intraday lows near $87,000.
Altcoin market recovers
In the past 24 hours, the altcoin market picked up pace as it rose 4.6% to $1.35 trillion but lost a portion of these gains as late day selling began.
Ethereum (ETH) rallied a little above $3,000 before parting with some of its gains and settling at $2,988, with gains of 2.2%.
Other major altcoins, such as BNB (BNB), XRP (XRP), Solana (SOL), and Dogecoin (DOGE), traded slightly above break even with gains of 1-2% as of last check.
Pippin (PIPPIN) led altcoins, rallying over 50%, supported by a short squeeze and a technical breakout from a key resistance level that spurred bulls to target higher prices.
However, some market watchers called foul play, speculating that the recent pump may be a result of market manipulation as suggested by on-chain data. See below.
I just found manipulation inside $PIPPIN
Here’s what is happening:
PIPPIN pumped +60% in 24h from ~$0.44 to ~$0.55
Before pulling back fast to ~$0.48.
Onchain data shows clear signs of whale distribution
Most of the selling traces back to the same wallet:
Hyperliquid (HYPE) surged by 23% as it extended its rally for a second day, primarily driven by explosive growth in commodity perpetuals.
Under the recently implemented HIP-3 framework, builders can permissionlessly deploy new markets by staking 500,000 HYPE, which has created a significant supply sink as traders flock to the platform’s high-volume silver and gold contracts.
This surge in activity directly feeds the protocol’s ‘buy and burn’ engine, which utilises a vast majority of trading fees to aggressively remove HYPE from the circulating supply.
For Jupiter (JUP), which also clocked 12.6% gains, support was largely driven by its growing traction in the RWA (Real-World Asset) sector.
Besides this, it has recently completed a full integration with crypto exchange Coinbase, which now routes Solana-based token swaps directly through Jupiter’s liquidity engine.
Source: CoinMarketCap