Fed "Standing Still", Risk of Rate Hike Returns: Bitcoin Loses 76K Level Amid Liquidity Pressure

Early morning on March 19, the Federal Reserve announced its latest interest rate decision, holding rates steady for the second consecutive meeting. The new rate and economic forecasts indicate that policymakers still expect to cut rates this year and project inflation at 2.2% by the end of 2027.

After an eight-day record-breaking rally starting March 9, reaching $76,000, Bitcoin has experienced a correction over the past few days, dropping to around $71,000, with a low of $70,500. Meanwhile, ETH has fallen from about $2,400 to $2,200. Overall, altcoins are all down in value.
According to Coinglass, based on liquidation data, in the past 24 hours, the total unexecuted contract liquidations across the network reached $458 million, with long positions accounting for $385 million.
At the close of trading, the Dow Jones Industrial Average fell 768.11 points, or 1.63%, to 46,225.15, the lowest level of the year. The Nasdaq Composite declined 1.46% to 22,152.42, and the S&P 500 dropped 1.36% to 6,624.70. As of now this month, the Dow has fallen more than 5%, potentially marking the worst monthly decline since 2022.
Discussion of the Possibility of Rate Hikes Again
February’s PPI data far exceeded expectations, inflation pressures increased, and signals of monetary tightening from the Federal Reserve have significantly reduced expectations for rate cuts this year. Crude oil prices surged, while US stocks and bonds declined, and the US dollar recovered to the 100 mark.

According to the latest data from Polymarket, the market currently prices in a 27% chance that the Fed will hold rates steady this year, up slightly by 4%. The probability of a 25 basis point rate cut is 33%, and the chance of two cuts totaling 50 basis points has decreased to 20%.
Powell clearly stated that he will not consider rate cuts until inflation continues to improve; meanwhile, the committee has begun discussing the possibility of raising rates, although this is not the baseline scenario most officials assume. Powell pointed out that the pace of inflation reduction has slowed significantly, and short-term inflation expectations have risen again in recent weeks. Price pressures from tariffs still impact core inflation, while rising oil prices due to Middle East tensions create new upside risks. Commodity inflation may not decrease significantly until at least mid-year.
Powell acknowledged that employment growth is currently low and that the “balance” in the labor market is fragile amid slowing labor supply. Meanwhile, energy shocks not only push prices higher but could also have negative ripple effects on employment and the economy by dampening consumption, tightening business costs, and disrupting supply chains.
The conflict with Iran has led to attacks on energy facilities and threats of blockade in the Strait of Hormuz, causing markets to quickly worry about oil supply disruptions, with Brent crude briefly surpassing $107. Powell emphasized that it’s very difficult to predict how long this shock will last or how severe its impact will be, but its potential effects on the US and global economy should not be underestimated.
Carl Shamotta, Chief Market Strategist at Corpay, said: “The Federal Reserve’s decision to keep rates unchanged and make only small adjustments to the policy statement indicates officials intend to follow long-standing monetary policy practices and adopt a ‘wait-and-see’ approach to the widespread energy price shocks currently affecting the global economy.”
Anshur Sharma, Chief Investment Officer at Savvy Wealth, said: “I think we are in a highly volatile phase. If oil prices remain at current high levels… we know this will impact the entire economy. A continued energy shock will push inflation higher while growth begins to slow, creating a ‘dangerous combination.’ This will make it even harder for the Fed to balance its dual mandate.”
He Will Not Leave the Federal Reserve During the Ongoing Legal Investigation
At the meeting, Powell stated he will not leave the Federal Reserve during the investigation and will continue to serve as “acting chair” if necessary. He said he has no plans to resign as governor until the investigation is complete, with a transparent process and clear conclusions; if a successor is not appointed before his term ends, he will remain as acting chair per legal requirements until a new chair is officially appointed, ensuring the Fed’s operations and independence are not politically compromised.
Jerome Powell is currently the Chair of the Federal Reserve, with his term ending on May 15, 2026. The Trump administration announced in late January that they had nominated Kevin Warsh (a former Fed governor who resigned in 2011 in protest of quantitative easing) as his successor, a more hawkish candidate aligned with White House interest rate priorities.
However, the Senate confirmation process has stalled — Republican Senator Thom Tillis of North Carolina explicitly stated he would not continue to nominate Warsh until the legal investigation into Powell is thoroughly resolved. This means the leadership transition at the Fed depends directly on the outcome of that investigation.
Implications for the Cryptocurrency Market
As expectations of Fed rate cuts diminish and market liquidity faces pressure, what will happen next in the crypto markets?
Wintermute published an article suggesting that selling pressure during the early phase of the bear market appears to have eased, but confirmation is needed before officially declaring the market has entered a new phase. The current market structure is more positive than a few months ago. The adjustment of Coinbase’s premium, inflows into ETFs, and institutional flows from trading desks all point in the same direction. The $60,000 level seems to have attracted genuine institutional buying support, which is a very important prerequisite.
Wintermute notes that $74,000 and $80,000 are key resistance levels to watch for BTC. A cycle-based analogy is also worth remembering: historically, the move from peak to trough has taken about 400 days, whereas we are currently in a bear market that has lasted less than 200 days.
Due to structural reasons—including the adoption of stablecoins and RWA, the maturing of institutional infrastructure, and the absence of fundamental volatility—this bear market is likely to be shallower than previous cycles, but that does not mean we should have unrealistic expectations about the speed of recovery.
This week, Glassnode tweeted that Bitcoin surpassed $74,000, with short-term holders realizing huge profits of up to $18.4 million per hour. This aligns with the pattern observed in February: short-term holders continuously capitalize on the rally around $70,000, absorbing upward momentum before any real breakout can form.