On January 28, 2026, the Federal Open Market Committee (FOMC) decided to maintain the target range for the federal funds rate at 3.50% to 3.75%, marking the first pause in rate adjustments since the easing cycle began in late 2025. The decision was widely expected by markets (near-100% probability of no change priced in), but two dissenting votes — Governors Stephen I. Miran and Christopher J. Waller — advocated for a 25 basis point cut, highlighting internal debate over the pace of policy normalization.
Chair Jerome Powell, in the post-meeting press conference, emphasized that the U.S. economy remains on a “firm footing,” with solid growth, stabilizing employment, and inflation “somewhat elevated” but trending toward the 2% target. He reiterated that rates are currently “appropriate” to support progress toward both employment and price stability goals, while carefully assessing incoming data and risks.
Market Reaction: Risk-On Relief, Then Pullback
Crypto markets initially reacted positively to the hold, interpreting it as confirmation that the Fed is no longer actively tightening and remains data-dependent rather than hawkish. Bitcoin (BTC) surged as high as $90,600 in the immediate aftermath — a brief 2%+ spike from pre-decision levels around $88,950–$89,000 — before retreating and consolidating near $89,300 by late U.S. session.
Key drivers of the crypto move:
- Pause = Neutral-to-Dovish Signal → Reduces immediate risk of higher-for-longer policy that could pressure risk assets.
- No Surprise Hawkishness → Markets had braced for potential upside inflation commentary; absence of that fueled short covering.
- Dissent for Cuts → Two governors preferring easing reinforces the possibility of future reductions, supporting risk-on flows.
- Broader Risk Sentiment → Equities (Nasdaq +0.4%), gold, and crypto all saw bid after the statement, though gains faded into the close.
Ethereum (ETH) held relatively steady near $3,000, showing less beta than BTC on this event.
Key Takeaways from the FOMC Statement & Powell Presser
- Economic Assessment — “Economic activity has been expanding at a solid pace.” Job gains “have remained low,” unemployment “has shown some signs of stabilization,” inflation “remains somewhat elevated.”
- Policy Stance — Rates are “appropriate” to promote progress toward dual mandate.
- Forward Guidance — “The Committee will carefully assess incoming data, the evolving outlook, and the balance of risks” when considering future adjustments.
- No Rush to Cut — Powell defended Fed independence amid political pressure from President Trump, stressing decisions are data-driven, not political.
- Inflation Path — Acknowledged progress but noted “somewhat elevated” readings require continued vigilance.
The decision aligns with market pricing (CME FedWatch Tool showed <3% chance of a cut in January) and reflects a Fed that is comfortable pausing after three consecutive 25 bps reductions in late 2025.
Implications for Crypto & Risk Assets in 2026
- Short-Term Relief Rally → The pause removes the tail risk of hawkish surprise, supporting risk assets including Bitcoin, Ethereum, and altcoins in the near term.
- Medium-Term Caution → No immediate cuts priced in until mid-2026 (June highest probability), meaning sustained higher rates could cap upside if inflation reaccelerates.
- Bitcoin as Macro Hedge → BTC’s surge to $90,600 post-decision reinforces its role as a hedge against fiat policy uncertainty and dollar weakness.
- Institutional Flows → Spot BTC ETFs saw early signs of inflow reversal after recent outflows; continued buying could stabilize or lift prices.
- Altcoin Sensitivity → ETH and others remain more vulnerable to risk-off moves; watch ETH/BTC ratio for relative strength signals.
Trading Outlook & Positioning on Tapbit
The FOMC hold creates a neutral-to-bullish backdrop for crypto, with Bitcoin holding above $88,000 and potential to retest $90,000–$92,000 if ETF inflows resume and macro risk premiums ease.
Tapbit Strategies:
- Spot Accumulation → DCA BTC/USDT on pullbacks to $88,000–$88,500 (strong support zone).
- Momentum Continuation → Long BTC/USDT perpetuals on breakout above $90,000 (20–50x leverage, isolated margin).
- Relative Value → Long ETH/USDT vs short BTC/USDT if ETH/BTC ratio shows reversal signs.
- Macro Hedge → Long XAU/USDT perpetuals if risk-off sentiment re-emerges.
- Risk Control → Max 1–2% account risk per trade; trailing stops below $86,000 (recent low).
Tapbit advantages: 0% maker fees on BTC/USDT spot, deep liquidity, up to 125x leverage on perpetuals, fast fiat ramps for Tokyo users.
FAQs – Fed January 2026 Decision & Crypto Reaction
Did the Fed cut rates in January 2026?
No — the FOMC held the federal funds rate steady at 3.50%–3.75%, the first pause since the easing cycle began in late 2025. Why did Bitcoin surge to $90,600 after the decision?
The hold was viewed as neutral-to-dovish (no hawkish surprise), triggering short covering and risk-on relief. Dissenting votes for cuts reinforced potential future easing.
What did Powell say about rates and the economy?
Powell described the economy as on a “firm footing,” rates as “appropriate,” and emphasized data-dependence. He defended Fed independence amid political pressure.
Is this bullish or bearish for crypto?
Short-term bullish (removes hawkish tail risk). Medium-term neutral — no immediate cuts priced in until mid-2026, so sustained higher rates could cap upside.
Conclusion & Near-Term Outlook
The Federal Reserve’s decision to hold rates at 3.50%–3.75% on January 28, 2026 — with two dissents for a cut — delivered a relief rally in risk assets, pushing Bitcoin briefly to $90,600 before consolidation near $89,300. The pause confirms the Fed is data-dependent rather than hawkish, supporting risk-on flows in crypto while leaving the door open for future easing if inflation continues cooling and employment softens. The crypto market remains sensitive to Fed rhetoric, ETF flows, and macro headlines — with Bitcoin holding key support at $88,000 and potential to retest $92,000+ on positive catalysts. Tapbit provides optimal execution for capturing this environment: 0% maker fees on BTC/USDT & ETH/USDT spot pairs, deep liquidity, up to 125x leverage on perpetuals, and fast fiat ramps for Tokyo-based traders. Monitor upcoming labor data, inflation prints, and ETF flows for the next directional move — the Fed pause sets the stage for a potential risk-on continuation in early 2026.
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Disclaimer: Cryptocurrency trading involves significant risk of loss. Prices are highly volatile and can change rapidly. FOMC decisions and economic data are subject to interpretation. This article is for informational purposes only and does not constitute investment advice. Always conduct your own research (DYOR) and never invest more than you can afford to lose completely.
