Published: January 30, 2026
On January 28, 2026, the Federal Open Market Committee (FOMC) voted to maintain the target range for the federal funds rate at 3.50%–3.75%, delivering the first pause in the easing cycle that began in September 2025. The decision was almost unanimously expected (CME FedWatch Tool priced a cut at <3%), yet it disappointed markets hoping for dovish forward guidance. Chair Jerome Powell emphasized that “the economy remains on solid footing” with job gains “low but positive,” unemployment “stabilizing near 4.4%,” and inflation “still somewhat elevated” around 2.9–3.0%. He explicitly stated that “further cuts are not likely in the near term” unless material weakening appears in data, effectively pushing the most probable first cut window to June 2026 or later.
Two governors dissented in favor of a 25 bps cut (Miran and Waller), underscoring internal division but not enough to shift the majority stance. The statement retained the “carefully assessing incoming data” language but removed any dovish tilt present in prior meetings. The result: immediate risk-off pressure across equities, crypto, and high-beta assets, with the US Dollar Index rebounding from four-year lows near 95.86 to stabilize above 96. This article examines the Fed’s rationale, crypto-specific implications (liquidity squeeze, leverage unwind, volatility spike), cross-asset reactions, technical levels for Bitcoin & Ethereum, and practical positioning strategies on Tapbit.
FOMC Statement & Powell Press Conference – Key Takeaways
- Rate Decision: Unchanged at 3.50–3.75% (8–1 vote; 2 dissents for cut)
- Economic Assessment: “Solid pace” of growth, “low but positive” job gains, unemployment “stabilizing,” inflation “somewhat elevated” but trending toward 2%
- Policy Stance: Current rates are “appropriate” to achieve dual mandate
- Forward Guidance: “Carefully assess incoming data, evolving outlook, balance of risks” — no commitment to near-term cuts
- Powell on Cuts: “We are not in a hurry… we can wait for greater clarity” — effectively ruling out March and likely May
- Inflation Comments: Acknowledged progress but stressed need for “more evidence” of sustained 2% path
Crypto Market Reaction – Liquidity Squeeze & Risk-Off Pressure
The decision triggered immediate risk aversion in crypto:
- Bitcoin: Briefly spiked to ~$90,600 on “sell the fact” relief, then reversed sharply as no dovish pivot materialized → now consolidating ~$88,900–$89,300
- Ethereum: Fell below $3,000 (down ~2–3% intraday) → more sensitive to liquidity/risk-off moves
- Altcoins: Broad-based weakness; SOL, SUI, TON down 4–7%
- Stablecoin Flows: USDT/USDC volumes surged ~40% as traders rotated out of leveraged positions
- Derivatives: Funding rates flipped negative on major perps; open interest declined ~8–12% in 24 hours
Liquidity Squeeze Mechanics
- Higher-for-longer real yields → opportunity cost of holding non-yielding crypto rises
- Reduced speculative leverage → forced deleveraging in perps and margin trading
- ETF outflows accelerate → spot BTC selling pressure from institutional rebalancing
- Stablecoin parking → USDT/USDC become preferred collateral and safe haven
Technical Levels & Sentiment Indicators (BTC/USD – Jan 30)
Current ~$88,950–$89,300
- Immediate Support: $87,500–$88,000 (prior breakout cluster)
- Critical Support: $86,000–$86,400 (recent swing low)
- Next Major Support: $81,000–$82,000 (November 2025 low zone)
- Immediate Resistance: $90,000–$91,000 (round number + 50-day EMA)
- RSI (Daily): ~42 → oversold, room for relief bounce
- Funding Rate: Negative across major exchanges → short-term bearish sentiment
Trading Strategies & Positioning on Tapbit
- Create your Tapbit account (0% maker fees)
- Deposit USDT or JPY via bank transfer / P2P
- Short-term hedge: Long USDT pairs or short BTC/USDT perpetuals (20–50x leverage) if funding remains negative
- Dip accumulation: DCA BTC/USDT or ETH/USDT on pullbacks to $86k–$88k zone
- Safe-haven rotation: Long XAU/USDT perpetuals on renewed risk-off flows
- Risk control: Max 1–2% account risk per trade; isolated margin; trail stops below recent lows
Conclusion & Near-Term Outlook for Crypto
The Federal Reserve’s decision to hold rates at 3.50–3.75% on January 28, 2026 — with Powell signaling no cuts likely before mid-year — has reinforced a higher-for-longer liquidity environment that pressures risk assets, including crypto. Bitcoin’s drop below $88,000 (and brief test near $87k) reflects ETF outflows, leverage unwind, and macro risk-off rotation, but on-chain metrics suggest limited spot panic and early dip accumulation. Stablecoins (USDT/USDC) are seeing volume surges as traders seek safety, while gold continues outperforming.
Trade BTC dips & stablecoin liquidity on Tapbit:
Disclaimer: Cryptocurrency trading involves significant risk of loss. Prices are highly volatile and can change rapidly. Fed 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.
