Bitcoin Drops to $81,300 as Investors Grow Cautious Ahead of Fed Decision

Financial markets took a hit on Tuesday as investors grew cautious ahead of the Federal Reserve's key policy decision. Bitcoin dropped to $81,300, losing 3.5% in 24 hours

Financial markets took a hit on Tuesday as investors grew cautious ahead of the Federal Reserve’s key policy decision. Bitcoin dropped to $81,300, losing 3.5% in 24 hours, while major U.S. stock indices also declined. The Nasdaq slid 1.7%, and the S&P 500 dropped 1.1%, reflecting uncertainty across global markets.

Bitcoin and crypto are sliding as markets grow nervous. The two-day meeting of the Federal Reserve commenced on Tuesday with results due to be known on Wednesday. Nobody expects the Fed to cut rates however, investors are waiting for any sign of softening in the Fed’s stance.

The Fed maintains its cautious tone even after inflation has eased somewhat and is not prepared to signal an early rate cut. February’s inflation numbers showed progress, but not enough for the central bank to shift policy immediately.

Meanwhile, strong job market data and consumer spending figures suggest the economy is still running hot, giving the Fed reason to hold off on rate cuts.

According to CME FedWatch, the chances of a rate cut in March remain at 0%, while May holds a 20% chance. For June, expectations have risen to 66%, as traders bet that the Fed will eventually have to ease monetary policy.

If Powell signals a shift toward rate cuts, Bitcoin and stocks could rebound quickly. But if he sticks to a tough stance, markets may see further losses. With uncertainty at its peak, all eyes are on the Fed. Will Powell reassure investors, or will markets face another selloff? The answer comes Wednesday.