CME FedWatch data shows high odds (83.9%) of no rate change at the January 2026 FOMC meeting, with a modest 16.1% chance of a 25bps cut from the current 3.75% federal funds rate. By March, probabilities split: 47.7% for unchanged rates, 45.4% for a total 25bps cut, and 6.9% for 50bps easing, signaling the Fed's cautious stance amid sticky inflation and resilient jobs data.
Crypto Market Impact
Stable or higher-for-longer rates typically pressure risk assets like Bitcoin by bolstering the dollar and favoring bonds over speculative holdings, potentially capping BTC's upside from the recent $87K stabilization post-2024 halving. However, the slim cut odds still fuel some optimism, as even minor easing could revive liquidity flows into ETFs and altcoins, echoing how 2025's prior cuts supported crypto's recovery amid institutional inflows.
Investment Strategy
Given your crypto focus, hold core BTC positions but trim leverage and watch for dips below $85K as entry points if January holds steady—pair with on-chain signals like ETF absorption rates. Diversify into BTC/ETH via spot holdings (5-10% allocation), avoiding FOMO until March data clarifies cuts; monitor via CryptoPanic for sentiment shifts aligning with your technical analysis routine.
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