FOMC Shockwaves: Crypto Traders Brace as Bitcoin Nears Critical Peak

Markets hold their breath as the Fed's shadow looms over crypto.

Bitcoin's bull run hits a inflection point—just as Wall Street's 'risk-on' crowd starts sweating their collateralized loan obligations.

When traditional finance catches a cold, decentralized markets reach for the Kleenex. This time? The Fed might just burn the whole box.

Key Insights:

• Traders await the FOMC Meeting for Fed rate cuts to resume after a long pause.
• Bitcoin price hints at approaching bull market peak, as per BTC historical data.
• Coinbase Premium Gap and MVRV Ratio resonated with the cycle peak amid weak trading volumes.

Crypto traders turned cautious ahead of the FOMC Meeting, causing Bitcoin price to lose upside momentum as the Fed rate cuts look delayed. $9 billion crypto market exit by Satoshi-era whale, potential altcoin season, and on-chain data also hints at an upcoming correction in BTC price.

Moreover, long-term holders (LTH), retail investors, and market experts expect the Bitcoin bull market to peak in the next few months.

Will Fed Chair Powell Cut Rates After FOMC Meeting?

U.S. Federal Reserve Chair Jerome Powell kept rate cuts on pause for a long time, citing tariffs-induced inflationary pressure. Fed rate cuts were delayed, and monetary policy wasn’t changed, limiting bitcoin price rally in this bull market.

At the time of writing, the CME FedWatch showed over 96% probability of the Fed keeping the interest rate unchanged. However, the data still showed odds of two rate cuts by December.

US President Donald TRUMP met with Powell and visited the Federal Reserve, building pressure on the FOMC to resume interest rate cuts. The US housing market is showing signs of a 2008-like housing bubble crash.

At the time of writing, the US dollar index (DXY) was advancing above 98.90. Also, the 10-year US Treasury yield showed volatility and ROSE to around 4.40%.

These macroeconomic factors are putting huge pressure on bitcoin price. Notably, PCE inflation forecasts showed inflation rising by 0.3% MoM, after a hot CPI inflation release.

Bitcoin Bull Market Peak Nears

Some long-term holders are exiting the crypto market, considering Bitcoin cycle peak around September-end. Analysts hold mixed reactions on it, with some claiming that crypto IPOs to prolong the bull market.

However, Galaxy Digital’s completion of the largest-ever crypto exit of over $9 billion in BTC for a Satoshi-era whale hints at an upcoming Bitcoin price correction.

Also, Bitcoin OG Willy WOO liquidated all his Bitcoin holdings, and an option trader opened the largest put in Deribit history for the price to fall below $110,000.

Historically, Bitcoin cycle has peaked after 12-18 months of halving. This makes mid-September and October the likely time for Bitcoin price to peak.

Matrixport reported on July 29 that fading Bitcoin trading volumes could signal Bitcoin price consolidation. The firm predicted a slowdown in August in the absence of a major catalyst.

Meanwhile, 10x Research also noted volumes shift in the crypto market, with funding dynamics changing and NAV premiums quietly retreating.

He cited it as the reason for MicroStrategy and Metaplanet skipping Bitcoin buy and not raising cash through new common share offerings.

On-Chain Data Supports Fall in Bitcoin Price

Bitcoin Coinbase Premium Gap turned negative again, indicating weakening demand in the US market. Meanwhile, Kimchi premium remains negative, indicating Asian markets are shorting Bitcoin.

Whales started to sell their holdings as the market turned cautious amid several headwinds for Bitcoin price to rally to $135,000.

Bitcoin MVRV Ratio at 2.34 also signaled a potential cycle peak, prompting traders to exercise caution. They could dump Bitcoin positions to treasury companies, which plan to hold for longer periods.

The 2025 cycle resembles the 2021 “double-top camel” pattern, as per a CryptoQuant analyst. He added that two peaks formed about six months apart could bring a challenging bear market.

Bitcoin price moved sideways in the past 24 hours, with the price trading at $118,901. The 24-hour low and high were $117,441 and $119,273, respectively.

Furthermore, average trading volume decreased in the last few days, indicating a decline in interest among traders.