Bitcoin Reacts to Fed Rate Hold as Coinbase Premium Turns Negative

Bitcoin made a sharp move following the U.S. Federal Reserve’s latest rate decision, briefly climbing before pulling back, as market participants digested the implications of unchanged interest rates. The initial volatility reflects investor uncertainty over the Fed’s tone and its outlook on inflation and liquidity conditions.

The central bank’s decision to hold rates steady, in line with market expectations, initially gave a modest boost to risk assets, including Bitcoin. However, the rally lost steam as traders weighed Jerome Powell’s comments, which signaled a cautious stance on future cuts, leaving the door open for extended tight monetary policy into late 2025.

Coinbase Premium Turns Red: A Warning Sign?

Notably, analysts flagged a negative Coinbase premium—a key market indicator that measures the difference between Bitcoin prices on Coinbase (U.S.) and Binance (global). When the premium turns red, it typically indicates weaker U.S. buying pressure relative to international demand, often signaling bearish sentiment among U.S. investors.

A sustained negative premium can hint at institutional outflows or hesitation among large U.S.-based buyers, particularly after major macro events like a Fed decision. Combined with declining volume and stagnant ETF inflows, some analysts are viewing this signal as a short-term caution flag for Bitcoin’s price action.

What’s Next?

Bitcoin remains locked in a familiar trading range between $61,000 and $65,000, with macro policy, ETF flows, and global liquidity conditions driving sentiment. The Fed’s “wait-and-see” approach could keep markets on edge, especially as inflation readings and labor data continue to guide expectations.

For now, the muted reaction and weakening U.S. premium suggest that Bitcoin’s next breakout may not be imminent, but it’s still firmly on the radar of macro traders watching for any policy shift.

Also read: Ray Dalio Recommends 15% Bitcoin Allocation for Balanced Portfolios