Bitcoin recovery stalls after the Federal Reserve held interest rates steady, citing ‘uncertainty’ in the Middle East. The price dropped under $75,000 on April 29, 2026, following the release of FOMC minutes. This marks a key moment for traders watching support levels.
Fed Holds Interest Rates, Bitcoin Reacts
The Federal Open Market Committee (FOMC) minutes confirmed the Fed’s decision to keep the target range for the federal funds rate at 3-½ to 3-¾ percent. The committee noted ‘developments in the Middle East’ as a factor fueling uncertainty. It stressed maintaining optionality while evaluating risks to its dual mandate of maximum employment and 2% inflation.
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Bitcoin (BTC) extended its two-day decline on Wednesday. The price fell to an intra-day low of $74,937. This was slightly below the 20-day simple moving average of $75,664. Some traders identified this level as critical for confirming a support-resistance flip.
Data from CNBC showed the FOMC minutes with new statements highlighted in red. The Fed’s hold on rates aligned with market expectations. But Bitcoin remained fragile throughout Chairman Powell’s press conference.
Market Reaction: Sell the News
Hyblock CEO Shubh Varma described the price action as ‘the usual sell the news reaction after the FOMC.’ He noted that BTC ‘quickly recovered to pre-announcement levels within hours, showing strong underlying conviction.’
Varma added data to back his view. ‘The global bid ask ratio spiked to 0.3 (one of the highest readings), while open interest fell on the price drop. This is classic post-FOMC position squaring and stop-hunt behavior rather than conviction selling.’
The BTC/USDT global bid ask ratio from Hyblock showed this spike. It suggests traders were adjusting positions rather than fleeing the market.
Support Levels Under Pressure
After the FOMC minutes, BTC dropped below the 20-day MA. This failure to recapture the moving average could signal a loss of momentum. It opens the path for Bitcoin to test the downside boundary of a near-4-month-old channel.
As reported on Monday by Cointelegraph, after the break above channel resistance on the daily chart, BTC required consecutive daily candle closes above the trendline. A lower support retest in the $76,500 to $75,500 range followed. All these conditions have happened. But failure to close above the trendline resistance could be interpreted as a bearish sign.
Bitcoin Traders Turn Bearish
Prior to Chairman Powell’s presser, Glassnode analysts noticed Bitcoin traders adding bearish use. They cited rising open interest after Tuesday’s rally to $79,000. Funding remained neutral. There was a divergence between the spot and futures market cumulative volume delta (CVD).
Additional analysis from Glassnode’s The Week Onchain report depicted Bitcoin’s price action as ‘trapped below market mean.’ The report said $65,000 to $70,000 act as support. But weak demand prevents the formation of sustainable rallies.
Bitcoin failed to overcome its True Market Mean at $79,000. A surge in short-term holders’ profit taking, along with margin futures flipping net short, has sapped away Bitcoin’s shorter-term bullish momentum.
Institutional Flows Offer Support
While these factors increase Bitcoin’s sensitivity to a sharper downside move, Glassnode analysts said institutional flows into spot BTC ETFs and rising CME open interest have helped build a ‘dense accumulation cluster between $65K and $70K.’
This cluster could act as a safety net. It may prevent a deeper correction. The CME open interest and US spot ETF AUM position change data from Glassnode supports this view.
What This Means for Bitcoin
The Fed’s decision to hold rates reflects caution. The Middle East uncertainty adds to global economic risks. For Bitcoin, this means continued volatility. The $75,000 level is now a key battleground.
Industry watchers note that the underlying conviction remains strong. The quick recovery after the initial drop suggests buyers are still active. But the failure to hold above the 20-day MA is a warning sign.
The implication is that Bitcoin may test lower support levels. The $70,000 area could be the next stop if selling pressure increases. But institutional flows could provide a floor.
Conclusion
Bitcoin recovery stalls after the Fed holds interest rates. The Middle East uncertainty adds to the bearish sentiment. Traders are watching the $75,000 level closely. Failure to hold could lead to a test of $70,000. But strong institutional demand may limit the downside. This article is produced in accordance with Cointelegraph’s Editorial Policy and is intended for informational purposes only. It does not constitute investment advice or recommendations.
FAQs
Q1: Why did Bitcoin drop after the Fed meeting?
A1: Bitcoin dropped because the Fed held interest rates steady and cited uncertainty in the Middle East. This spooked traders, leading to a sell-off.
Q2: What is the key support level for Bitcoin?
A2: The key support level is around $75,000. If it breaks, the next support is between $65,000 and $70,000, where institutional demand is strong.
Q3: What did the FOMC minutes say about inflation?
A3: The FOMC minutes expressed slight concerns over inflation. The Fed maintains its goal of achieving 2% inflation over the longer run.
Q4: How did institutional investors react to the price drop?
A4: Institutional flows into spot Bitcoin ETFs and rising CME open interest helped build a dense accumulation cluster between $65,000 and $70,000, providing support.
Q5: Is this a good time to buy Bitcoin?
A5: This article does not provide investment advice. Traders should conduct independent research and consider their risk tolerance before making decisions.
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