Bitcoin climbs to $64,000 as traders eye Fed rate decision

Bitcoin climbed to $64,000 on Wednesday, shaking off a broader slump in technology stocks driven by weakness in artificial intelligence-related shares. The world's largest cryptocurrency by market value rose as traders looked ahead to the Federal Reserve's next interest rate decision.

Crypto markets ignore tech sector jitters

The rally came even as major US tech indices faced pressure from a selloff in AI-linked stocks. Markets have grown cautious about stretched valuations in the sector, with several high-profile AI companies reporting earnings that failed to meet lofty expectations.

Bitcoin, often traded alongside risk assets like tech stocks, has shown resilience in recent sessions. Analysts say the move suggests a degree of decoupling, at least in the near term, as crypto traders focus on macroeconomic catalysts rather than sector-specific headwinds.

Fed decision in focus

The primary driver of sentiment this week is the US Federal Reserve's policy announcement, scheduled for later on Wednesday. Markets widely expect the central bank to hold interest rates steady, but traders will parse the accompanying statement and press conference for clues about future moves.

Lower interest rates tend to boost demand for speculative assets like cryptocurrencies, as they reduce the opportunity cost of holding non-yielding investments. A dovish tone from Fed Chair Jerome Powell could provide further fuel for Bitcoin's rally.

Some economists, however, caution that sticky inflation data could keep the Fed on a hawkish path. The central bank has maintained that its decisions will remain data-dependent.

Bitcoin's technical levels and outlook

At $64,000, Bitcoin is trading near the upper end of its recent range. The cryptocurrency has oscillated between $60,000 and $66,000 over the past month, failing to break decisively above resistance levels.

Traders are watching whether a clear move above $66,000 could open the door to testing the all-time high near $73,000. A failure to hold $62,000 support, on the other hand, could trigger a retest of the $60,000 mark.

Open interest in Bitcoin futures has risen in tandem with the price, indicating fresh capital entering the market. Funding rates remain moderate, suggesting the rally is not yet driven by excessive leverage.

Regulatory and institutional backdrop

The broader crypto market has also drawn support from continued institutional adoption. Spot Bitcoin exchange-traded funds in the US have seen steady inflows, even during periods of price consolidation.

Regulatory clarity in key jurisdictions, including India, remains a work in progress. The Indian government has not yet finalised a comprehensive crypto framework, though industry participants expect progress in the coming months.

For now, Bitcoin's trajectory hinges on the Fed's message. A rate cut signal could push prices higher, while a hawkish surprise may reverse the recent gains.