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Bitcoin remained rangebound below the $118,000 mark as traders adopted a cautious stance ahead of the Federal Open Market Committee (FOMC) meeting scheduled for later today.
The total cryptocurrency market capitalisation fell by over 5%, slipping to $3.92 trillion.
Both Bitcoin and altcoins experienced declines, with losses distributed broadly across the market.
Despite the overall market weakness, sentiment showed a slight improvement.
The Crypto Fear and Greed Index inched up by one point to 74. This modest uptick was supported by constructive diplomatic talks between the United States and China in Stockholm.
However, the improvement in sentiment failed to lift altcoin prices.
Most alternative cryptocurrencies registered notable losses during the day, underscoring the market’s reluctance to take on additional risk ahead of the FOMC decision.
Why is Bitcoin stuck?
Bitcoin’s price remains pinned below the $118,000 level due to a convergence of macroeconomic uncertainties and risk-off positioning across the market.
Investors are bracing for the Federal Reserve’s upcoming interest rate decision and the policy signals that may follow.
While market participants widely expect the Fed to hold rates steady, the strong economic data released earlier this week has complicated the outlook.
A report from ADP revealed that the US economy added 104,000 jobs in July, far exceeding expectations.
Additionally, GDP data showed a 3% expansion in the second quarter, marking a sharp recovery from the 0.5% contraction in Q1.
These figures suggest that the economy is running hotter than anticipated, raising the possibility that the Fed may maintain a hawkish tone in its post-meeting commentary.
Traders now expect the central bank to leave rates unchanged but refrain from signalling an imminent pivot to rate cuts, despite public pressure from President Donald Trump to ease monetary policy.
This uncertainty has kept traders from taking aggressive positions, especially in high-risk assets like cryptocurrencies.
Open interest in Bitcoin futures has dropped sharply, with TRDR reporting a decline to $49.58 billion from $50.58 billion at the US market open.
This drawdown coincided with broader market weakness, as over $111.97 million in long positions were liquidated across the crypto market in the past 12 hours, according to Coinglass.
Adding to the cautious tone are global trade tensions.
Trump’s recent announcement of a 25% tariff on Indian goods effective August 1 has heightened concerns about a broader trade war.
Other countries, including Brazil, South Korea, and South Africa, are also facing tariff threats this week.
These geopolitical developments have weighed on risk appetite and dampened speculative activity across the crypto market.
Markets are also waiting for the release of a White House report on US crypto policy, which is expected to include details about Bitcoin holdings currently held by the government.
There is speculation that Trump may push for a strategic Bitcoin reserve, but no concrete policy action has emerged so far.
As these economic and geopolitical factors play out, Bitcoin remains trapped within a narrow range.
With the Fed decision and Powell’s remarks due later today, traders are holding back until a clearer direction emerges.
What’s next for Bitcoin?
Bitcoin’s next move will likely depend on the tone and content of Federal Reserve Chair Jerome Powell’s post-meeting comments.
While the market widely anticipates no change in interest rates, traders remain focused on whether Powell hints at future rate cuts or continues to emphasise data-dependence and inflation control.
Crypto investors, including notable names like TedPillows, observed signs of panic selling earlier this week.
Yesterday looked like pure panic selling ahead of today’s FOMC and rate decision. People likely dumped their bags in fear. But they’ll probably end up FOMO buying back in at higher prices after the Fed speaks. Why does this feel so familiar? We’ve seen this pattern repeat so
According to him, uncertainty around Powell’s speech triggered fear-driven exits, with many dumping their holdings ahead of the event.
He noted that such behaviour often precedes strong August rallies, as sidelined investors re-enter the market in response to dovish cues or momentum shifts.
Market participants are also watching Friday’s US nonfarm payrolls report and the timeline of new Trump-imposed tariffs on several countries.
Any adverse developments in these areas could introduce further volatility, particularly if they influence rate expectations or broader risk sentiment.
Technically, Bitcoin faces a key resistance zone around $120,000.
Multiple analysts believe a decisive breakout above this level could open the door for a sharp move toward new all-time highs.
Glassnode’s latest “Week Onchain” report identifies $141,000 as the next major upside target.
This level sits two standard deviations above the short-term holder (STH) realised price and historically signals intense profit-taking.
A secondary resistance to monitor is $125,000, which reflects the STH cost basis pushed one standard deviation higher.
If the BTC gains momentum past this threshold, bullish conviction could accelerate.
On the downside, immediate support lies around $114,000 to $116,000.
Analysts like Killa suggest that Bitcoin may briefly drop below this zone to fill a fair value gap near $112,000 before rebounding.
Bitcoin/USDT price chart. Source: Killa on X.
A deeper correction could test the STH cost basis at $105,400 or even the yearly open near $93,000, which aligns with the lower bound of current volatility bands.
Others, like pseudonymous crypto analyst Henry, urged followers to zoom out and look at the broader picture.
In an X post earlier today, Henry stated that he remains unconcerned by Bitcoin’s short-term volatility.
He attributed the recent choppiness to profit-taking by large holders and described the price action as a textbook bullish pennant formation.
BTC/USD 4-hour chart. Source: Henry on X.
According to him, the ongoing shakeout is part of a typical liquidation hunt that often precedes breakout rallies.
He argued that the broader market is reacting with panic, but the technical setup remains constructive for a strong upside move once selling pressure exhausts.
When writing, Bitcoin is hovering just over $118,100, up less than 1% in the past day.
Altcoins recede but analysts remain optimistic
Over the past 24 hours, the altocin market cap briefly rallied 2% to an intraday high of $1.6 trillion before settling slightly lower over the day at $1.56 trillion.
In its Q3 2025 Investment Outlook, digital-asset bank Sygnum stated that the long-anticipated altseason may have begun.
The report cited improved regulatory clarity, increased liquidity, and rising on-chain activity as the main drivers behind the shift in market sentiment.
Earlier this year, geopolitical tensions and US fiscal concerns triggered an altcoin sell-off, but Sygnum believes shifting market conditions could “ignite the long-awaited altseason,”
Analysts at the bank believe regulatory clarity may push investors toward projects with real-world value and strong token models.
“This shift is already underway as some sectors currently show,” Sygnum noted in their report.
The report also flagged that Bitcoin’s market dominance was dropping.
CoinMarketCap data shows that Bitcoin dominance has fallen 4% since its June high, while Ethereum dominance has picked up 3.2% during the same period.
Despite the optimism around altcoins, the bank cautioned that surging altcoin momentum could trigger another memecoin bubble, potentially ending in a sharp correction if speculation remains unchecked.
As of press time, Ethereum (ETH) was trading at $3,788, up around 1% over the past day, while other large-cap altcoins showed a mixed sentiment, with XRP (XRP) up 1.4% while Solana, Dogecoin, Tron and Cardano recording losses ranging between 1-3%.
The top gainers for the day posted modest gains in line with the cautious market sentiment.
FORM, the utility token of the Four ecosystem and meme coin platform, was the only token to hold double-digit gains, up 16% when writing.
XDC Network (XDC) and Story (IP) followed with gains of 4.6% each. See below:
Source: CoinMarketCap
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