Bitcoin and Ethereum have recorded significant gains, standing at $89,842 and $3,026 respectively, as investors cautiously await the Federal Reserve’s first interest rate decision of 2026. According to data provided by the CME FedWatch Tool, there is a 97% statistical probability that the agency will maintain rates in the 3.5% to 3.75% range.
This scenario of tense calm precedes Jerome Powell’s appearance, whose rhetoric on the labor market, which currently features a 4.4% unemployment rate, will be decisive for the direction of cryptocurrencies. Despite weekly stability, institutional analysts warn of a potential narrative shift that could transform an expected pause into a bearish catalyst for risk assets.
Jummy Xue, co-founder of the management firm Axis, noted that market attention has shifted from the cost of capital to the Fed’s sensitivity to cooling employment. Therefore, if Powell prioritizes labor resilience over disinflation, any cut for the month of March could be ruled out, affecting the liquidity that has recently boosted Bitcoin.
The labor market dilemma and the shadow of recession
The complexity of the current macroeconomic landscape suggests that traders must prepare for an informational whipsaw derived from the interest rate decision and its future projections. On one hand, the acceleration of the U.S. economy during the first half of 2026 contrasts with a labor sector that continues to lose momentum, raising doubts about the sustainability of growth without new monetary stimulus.
Furthermore, experts from the analytical firm Nansen believe that a dovish tone from the Fed could pull forward easing expectations into the second quarter of the year. However, the Myriad prediction market estimates only a 33% probability of deep cuts before July, reflecting persistent skepticism among investors who seek to protect themselves through hedging strategies against currency debasement.
Will the CLARITY Act be able to provide the regulatory support that Bitcoin needs?
In addition to monetary factors, political uncertainty in the Senate regarding the CLARITY Act adds an extra layer of complexity to the digital asset ecosystem. The postponement of critical sessions on this regulatory framework, combined with the proximity of a potential government shutdown on January 30, keeps large capital in a defensive stance during this crucial week.
Finally, Bitcoin’s correlation with tech indices such as the Nasdaq 100 suggests that any weakness in traditional equities could drag digital currencies into deeper corrections. The interest rate decision is expected to act as the ultimate pivot, while the crypto sector closely monitors employment data to adjust its positions in a high-volatility environment.
