Market Risk Insight: FOMC Relief Rally & BTC Outlook

The stock market saw the biggest FOMC relief rally since July after Jerome Powell reassured investors that the Fed sees no need for drastic action on tariffs and inflation. Here’s the breakdown of its impact on BTC, DXY, and S&P 500:

S&P 500 Rebounds as Powell Calms Markets

SPX up 1.1%, Nasdaq up 1.3%, Dow up 0.9% – The biggest FOMC-day rally since July.

Powell called the impact of tariffs on inflation 'temporary' – Investors relieved as the Fed remains less hawkish.

Fed holds interest rates steady, reduces QT starting April – Balance sheet tapering to slow from $25B to $5B.

Impact on BTC: Bullish as risk-on sentiment improves and investors grow more comfortable with risk assets.

Bond Yields Decline, Boosting Risk Assets

10Y yield drops 4 bps to 4.25% – Bond rally signals that the market does not expect tighter Fed policy.

2Y yield falls below 4% – Dovish repricing of Fed expectations.

Impact on BTC: Bullish as lower bond yields typically support BTC upside.

DXY Gains, But Limited Upside

DXY up 0.2% – Modest strength, but not aggressive enough to weigh on risk assets.

Impact on BTC: Neutral as the slight DXY gain does not significantly pressure crypto.

BTC Key Levels: Post-FOMC Outlook

$85,700 - $87,300 (Resistance) – If risk-on momentum continues, BTC could test this range.

$82,400 (Pivot Zone) – Key level determining the short-term trend.

$79,600 - $77,800 (Support) – If the market pulls back after the initial FOMC euphoria.

Key Takeaways

If bond yields continue to drop, BTC remains bullish with a potential target of $87K+.

If markets start questioning the Fed's credibility, DXY could strengthen, pressuring BTC.

Monitor market reaction over the next 24-48 hours to see if the FOMC euphoria holds or if profit-taking emerges.

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