Bitcoin (BTC) struggled to maintain gains above $90,000 on Wednesday as gold surged to a record $5,300 per ounce while the US dollar index fell to multi-year lows.
The cryptocurrency briefly reached $90,500 before retreating to $88,800 ahead of the Federal Reserve's two-day policy meeting.
Markets widely expected the Federal Open Market Committee to hold interest rates steady at the 3.5%-3.75% range established after three consecutive cuts in late 2025.
Gold's advance extended a 20% year-to-date rally driven by safe-haven demand and dollar weakness. President Donald Trump's comments dismissing concerns about the weakening greenback reinforced expectations that the administration prioritizes export competitiveness over currency strength.
What Happened
Bitcoin has consolidated between $86,000 and $93,000 since November 2025, failing to capitalize on macro uncertainty that typically benefits hard assets.
Historical data shows Bitcoin declined in seven of eight FOMC meetings during 2025, with an average 9% drop following each decision.
Spot Bitcoin exchange-traded funds recorded $1.33 billion in net outflows during the week ending January 23, the second-largest weekly redemption on record. The Crypto Fear & Greed Index has fallen into "extreme fear" territory as traders avoid risk positions ahead of Jerome Powell's post-meeting press conference.
Analyst Rekt Capital noted the current rebound from range lows reached only 4% compared to a previous 13% move, potentially indicating weakening support. A bearish trendline crossover on the weekly chart last month mirrored patterns that preceded multi-month declines in prior cycles.
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Why It Matters
The divergence between gold and Bitcoin reflects shifting safe-haven preferences amid geopolitical tensions and monetary policy uncertainty. Gold benefited from robust central bank purchasing averaging 60 tonnes monthly, well above the pre-2022 average of 17 tonnes monthly.
Bitcoin's correlation with traditional macro assets has increased as institutional adoption grows, making the cryptocurrency more sensitive to interest rate expectations and dollar liquidity conditions. The narrowing trading range and declining volatility suggest an eventual breakout, though direction remains unclear.
Traders focused attention on Powell's guidance regarding future rate cuts, with market expectations for two reductions in 2026 contrasting against the Fed's median projection of one cut. Any hawkish commentary could pressure Bitcoin as real yields rise.
The $86,000-$93,000 range has concentrated liquidity at extremes, forcing an eventual move to clear orders on one side. Technical indicators point to $84,400 as critical support, while resistance sits at $90,590.
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