Bitcoin Price Sinks as Crypto Markets Await Key FOMC Decision

Crypto markets are facing headwinds ahead of the US Federal Reserve's (Fed) key decision on interest rates. The Bitcoin price has dropped by nearly 3% in a day, trading around $75,600 on Wednesday morning. Ethereum also declined, down roughly 3.3%, while total crypto market capitalization is now around $2.58 trillion.

The decline is triggered by two primary factors: the US FOMC meeting and the U.S. regulatory environment. Market expectations indicate a nearly 90-93% chance of a 25-basis-point hike, which has priced in a Fed hike ahead of time. Risk assets such as cryptocurrencies are under pressure as Treasury yields rise, and oil prices remain high.

Traders expect the Fed's policy outlook to determine the market's reaction. A modest 25 bp hike is now fully priced, so if Chair Warsh signals a pause or less hawkish bias, risk appetite could bounce. However, any hint of more tightening to push inflation toward the 2% target may push the Bitcoin price down toward stronger support in the $73K-$76K range.