Is it Wise for Traders of Bitcoin, Ethereum, and XRP to Invest Ahead of the FOMC Meeting Under Trump’s Influence?

On Wednesday, Bitcoin, Ethereum, and XRP experienced a slight increase as traders prepare for the U.S. FOMC rate decision scheduled at 2 PM ET. Unlike previous bear markets, this time traders are observing shorter bear cycles followed by significant price recoveries.

The upcoming FOMC meeting could lead to increased price volatility for the top three cryptocurrencies, presenting opportunities for buying the dip or for traders to secure profits, amidst an ongoing bear market.

Sentiment Shifts to Risk-Off for Bitcoin, Ethereum, and XRP Traders

In the past 24 hours, traders of Bitcoin (BTC), Ethereum (ETH), and XRP (XRP) have reduced their activity in the derivatives market. Data from Coinglass indicates that trade volumes for BTC and ETH fell by approximately 11% and 7%, respectively, while XRP experienced a nearly 14% decline in its trade volume during the same period.

The Coinglass data reveals a shift towards risk aversion among traders, following around $89 million in liquidations across the top three cryptocurrencies in the last 24 hours.

The Open Interest metric, which represents the total value of all open contracts for a specific token, showed increases of 1.42%, 4.90%, and 1.49%, respectively, for BTC, ETH, and XRP.

On-Chain Analysis of BTC, ETH, and XRP

On-chain analysis by Santiment for the top three cryptocurrencies indicates that the Binance funding rate for Bitcoin has been positive for three consecutive days, suggesting that derivatives traders expect the price to rise, even amidst a decrease in trading activity, according to Coinglass data.

While the supply of Ethereum held by whales (excluding exchanges) remains largely unchanged, Bitcoin held by funds has been consistently declining. The number of active addresses on XRP increased on Wednesday after a drop on Tuesday, as noted by Santiment.

The mixed signals from on-chain data hint at a slightly bullish outlook for Bitcoin and XRP, while Ethereum’s price may stay stable or experience little change with the anticipated volatility ahead of the FOMC interest rate decision.

Trump’s Push and the FOMC Rate Decision

Gracy Chen, CEO of Bitget, informed Crypto.news that Trump’s pro-crypto position has left many traders feeling uncertain. The concept of establishing a U.S. strategic Bitcoin reserve is gaining momentum, suggesting that while the government has not yet begun purchasing Bitcoin, that could soon alter.

“The Stablecoin bill is advancing through Congress, signaling a significant shift towards a blockchain-based financial system. Influential figures, including Elon Musk, are looking into their own stablecoin initiatives, and Trump’s team views stablecoins as a means to safeguard the dollar’s status as the global reserve currency.

Considering the economy, Scott Bessent’s mention of a “detox period” implies that a managed downturn may be forthcoming. If that is the case, Trump’s strategy seems apparent: blame the recession on Biden, utilize tariffs and crypto narratives to control costs, and advocate for lower interest rates to stimulate tech and AI growth. Short-term discomfort, long-term advantage — that’s the blueprint.”

Chen holds an optimistic view on Bitcoin and anticipates it won’t fall below $70,000.

“The Bitcoin price could possibly decline to around $73-78k, presenting a strong entry point for buyers hesitant to act. In the next 1-2 years, predicting BTC at $200k isn’t as unrealistic as many may think.”

The FOMC interest rate decision is approaching, likely to trigger heightened volatility and price fluctuations as traders respond to the news.

Ryan Lee, Chief Analyst at Bitget Research, shared insights with Crypto.news in a written note:

“The FOMC meeting on March 19, 2025, is predicted to keep the federal funds rate unchanged at 4.25%-4.50%, as the Fed adopts a cautious, data-driven stance in light of ongoing inflation and robust economic expansion.

Crypto markets may experience a brief rally if the Fed hints at potential rate cuts, increasing risk appetite, or a decline if a hawkish stance reaffirm tighter financial conditions. Nonetheless, Bitcoin’s growing resilience and favorable pro-crypto policies may mitigate the broader market impact.”

Lee suggests that volatility is likely in the wake of the announcement, which could be influenced by comments from Federal Reserve Chair Powell and updated rate projections.

“The crypto market might continue demonstrating increased independence from Fed decisions. Following the FOMC meeting, Bitcoin is expected to trade within $80,000–$86,000 with 80% confidence, while Ethereum is projected to fluctuate between $1,800–$2,100 at the same confidence level. These ranges consider potential market reactions linked to macroeconomic indicators, investor sentiment, and overall financial conditions.”

Bitcoin Aims for $87,000, Ethereum Could Reach $2,100

Bitcoin is showing signs of recovery on Wednesday and could approach the $87,000 level. Currently, Bitcoin is trading at $83,517, and daily technical indicators suggest the potential for price gains.

The Relative Strength Index (RSI) for Bitcoin is at 44 and trending upward, supporting a positive momentum narrative concerning the token’s price trajectory. The MACD has displayed green histogram bars for the fourth consecutive day, reinforcing the bullish outlook for Bitcoin.

Ethereum has risen by 2.39% today, positioning itself for a retest of the crucial $2,000 level before striving to reach the $2,100 support level, representing a nearly 7% increase in Ethereum’s price.

Two primary momentum indicators on the Ethereum price chart, RSI and MACD, support ETH’s price recovery on the daily timeframe.

A flash crash in Bitcoin could drag Ethereum down to its recent low of $1,754.

XRP Price Prediction

XRP could rise by nearly 7% and test the crucial resistance level at the upper boundary of a Fair Value Gap on the daily timeframe, approximately $0.2707. The RSI is trending upward at 47, inching closer to neutral at 50.

MACD signals a bullish trend underpinning XRP’s price movement.

XRP traders are currently waiting for further developments regarding the U.S. financial regulator’s lawsuit against Ripple. Additionally, a significant market influencer is XRP’s inclusion in the Strategic Reserve, as per President Trump’s executive order signed on March 6.

The outcomes of these developments could significantly influence XRP’s price in the short term, along with the volatility triggered by the FOMC rate decision.