Bitcoin rose above the $89,000 level on Wednesday but continued to trade within a narrow range, as investors balanced the weakness of the US dollar and record-high gold prices against caution ahead of the US Federal Reserve’s monetary policy decision due later in the day.

The world’s largest cryptocurrency was trading up 1.1% at $89,235.8 as of 02:07 ET (07:07 GMT).

Bitcoin trades sideways as markets await the Fed

Bitcoin found support from the broad decline in the US dollar, after President Donald Trump played down concerns over the recent weakness of the American currency.

The dollar hovered near its lowest levels in four years, while gold extended its strong rally, posting fresh record highs above $5,200 per ounce. This environment boosted demand for alternative assets seen as stores of value.

Despite these supportive factors, Bitcoin struggled to stage a decisive upside breakout, remaining confined to a tight range between $88,000 and $89,000.

Trading positions remained relatively light, as investors stayed on the sidelines awaiting clearer signals from the Federal Reserve. Risk appetite has been constrained by uncertainty surrounding the near-term path of US interest rates, as well as ongoing questions over the central bank’s independence.

The Federal Reserve is widely expected to keep interest rates unchanged at the conclusion of its policy meeting later on Wednesday. Market participants are focusing closely on the accompanying statement and comments from Fed Chair Jerome Powell for clues on the timing of potential rate cuts, particularly as inflation shows signs of easing while the US economy continues to display a degree of resilience.

Lower interest rates typically support non-yielding assets such as Bitcoin by reducing the opportunity cost of holding them.

Adding another layer of uncertainty, markets are also watching for developments related to Trump’s expected nomination of a new Federal Reserve chair. Investors are assessing the potential impact of political influence on the monetary policy framework and the central bank’s tolerance for higher inflation.

Cryptocurrency prices today: modest gains for altcoins

Most major alternative cryptocurrencies posted modest gains on Wednesday, tracking Bitcoin’s advance. Ether, the world’s second-largest cryptocurrency, rose 2.6% to $3,006.92.

XRP, the third-largest cryptocurrency by market value, climbed 1.1% to $1.92.

Oil prices held near their highest levels in almost four months during Wednesday’s trading, supported by disruptions to US crude production caused by a severe winter storm, alongside a weaker US dollar and ongoing supply issues in Kazakhstan.

By 10:17 GMT, Brent crude futures slipped 39 cents, or 0.6%, to $67.18 per barrel, while US West Texas Intermediate crude fell 22 cents, or 0.4%, to $62.17 per barrel. Both benchmark contracts had climbed around 3% in Tuesday’s session.

This performance came amid continued weakness in the US dollar, which is trading near a four-year low against a basket of major currencies, making dollar-priced commodities such as oil cheaper for holders of other currencies.

On the supply side, ship-tracking firm Vortexa said US Gulf Coast crude oil exports fell to zero on Sunday, before recovering on Monday, after a powerful winter storm swept across large parts of the United States.

Gradual recovery in Kazakhstan

Lost output in Kazakhstan also helped support prices, although the OPEC+ member hopes to gradually resume production at the Tengiz field within a week. Sources familiar with the matter said, however, that the recovery process could take longer than expected.

In the same context, sources said CPC, the operator of the pipeline that carries around 80% of Kazakhstan’s oil exports, has restored full loading capacity at its Black Sea terminal after completing maintenance work on one of its berths that was damaged by drone attacks.

The OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries, Russia, and other allies, is expected to maintain its decision to pause oil output increases for March at a meeting scheduled for February 1, according to delegates from the group.

On the other hand, prices could face some pressure as US officials work on issuing a general license that would ease some of the sanctions imposed on Venezuela’s energy sector, according to sources familiar with the discussions.

On the geopolitical front, US officials said an American aircraft carrier and accompanying warships have arrived in the Middle East, strengthening President Donald Trump’s ability to defend US forces or carry out potential military actions against Iran. This development has heightened concerns over possible disruptions to oil supplies from OPEC’s fourth-largest crude producer.

On the demand side, a Reuters poll showed that US crude oil and gasoline inventories are expected to rise in the week ended January 23, while distillate stockpiles are likely to decline. Official government data are due to be released later today at 15:30 GMT.

The US dollar regained some balance on Wednesday after a sharp sell-off, as US President Donald Trump appeared largely unconcerned about the currency’s recent weakness, while strong corporate earnings kept global equity markets near record highs ahead of the Federal Reserve’s policy decision.

The US currency edged slightly higher, moving away from levels close to a four-year low. However, market sentiment remained fragile following the largest bout of selling since Trump’s tariff measures rattled markets last April.

European equities declined, while US equity futures pointed to a positive opening on Wall Street. Japan’s Nikkei index posted modest gains, while the MSCI world equity index hovered near its all-time highs.

Jan von Gerich, chief market analyst at Nordea, said: “Last week, when it looked like there was a broad flight from US assets, we saw equities fall, pressure on Treasuries, and a weaker dollar. Now the story is much more focused on the dollar itself.” He added: “The most important aspect of tonight’s Fed meeting is that Jerome Powell may now address political pressure, something he has completely avoided so far.”

The Federal Reserve is widely expected to keep interest rates unchanged at a meeting overshadowed by a criminal investigation launched by the Trump administration into Fed Chair Jerome Powell, ongoing efforts to remove board member Lisa Cook, and the approaching announcement of a nominee to succeed Powell when his term ends in May.

Currency moves

The dollar index, which tracks the US currency against six major peers, rose 0.25% to 96.16 points, after falling more than 1% on Tuesday to its lowest level in four years.

Trump said on Tuesday that the dollar’s value was “great” when asked whether he thought the currency had fallen too far.

While this stance is not new, traders interpreted the remarks as a signal encouraging further selling pressure on the dollar, at a time when markets are bracing for potential coordinated intervention by the United States and Japan to support the yen.

The dollar’s decline pushed the euro above the $1.20 level for the first time since 2021, while the Australian dollar briefly climbed above 70 cents, marking a three-year high. Gold surged to a fresh record, and dollar-denominated commodity prices also advanced.

Steve Englander, head of G10 FX research at Standard Chartered in New York, said: “Officials usually push back against sharp currency moves, but when the president appears indifferent or even supportive of them, that encourages dollar sellers to stay in the trade.”

Strong earnings

Elsewhere, ASML, the world’s largest supplier of chipmaking equipment, reported fourth-quarter bookings that exceeded expectations, signaling continued strength in AI-related demand. The company’s shares jumped 5%, outperforming the largely flat European equity market.

On Wall Street, in addition to the Fed decision, investors are awaiting earnings results from major technology firms, with Meta and Tesla set to report after the market close.

Dollar weakness continued to support other assets, with gold surging to a new record above $5,280 per ounce, while Brent crude rose to a four-month high at just above $68 per barrel.

In Asia, stronger-than-expected Australian inflation data for December reinforced expectations of an early interest rate hike, potentially as soon as next week. ANZ and Westpac revised their forecasts accordingly, bringing all four of Australia’s major banks into alignment on a rate hike scenario.

By contrast, Indonesia’s stock market plunged 7% after MSCI raised concerns over opaque ownership and trading structures and decided to suspend updates to the inclusion of Indonesian stocks in its global indices followed by investors worldwide.

Gold prices rose in European trading on Wednesday, extending gains for an eighth consecutive session and continuing to set new record highs after breaking above the $5,300-per-ounce level for the first time in history. The rally was driven by strong safe-haven demand, alongside a weak US dollar that is attempting to recover from a four-year low.

Later today, the Federal Reserve will conclude its first regular policy meeting of 2026 to assess the appropriate monetary stance for the world’s largest economy, with markets almost fully pricing in no change to interest rates.

Price overview

• Gold prices today: Gold rose by 2.6% to $5,311.60 per ounce, marking a new all-time high, from an opening level of $5,178.32, while the session low was recorded at $5,157.42.

• At Tuesday’s settlement, gold gained about 3.35%, marking a seventh consecutive daily advance and the largest one-day increase since August 16, driven by record safe-haven demand and a sharp drop in the US dollar following comments by Trump.

US dollar

The US dollar index rose by more than 0.4% on Wednesday, beginning to recover from a four-year low at 95.55 points, and heading for its first gain in five sessions, reflecting a rebound in the US currency against a basket of global peers.

Beyond bargain buying from depressed levels, the dollar’s recovery comes ahead of the release of decisions from the Federal Reserve’s first policy meeting of the year.

The US dollar has faced heavy pressure this month due to several factors, including policies of US President Donald Trump and concerns over the independence of the Federal Reserve.

In addition, a dispute between Republicans and Democrats over funding for the Department of Homeland Security, following the killing of a second US citizen by federal immigration officers in Minnesota, has raised fears of another US government shutdown.

Trump said on Tuesday that the dollar is “looking for its natural level,” a comment that analysts interpreted as a green light to sell the US currency.

US consumer confidence fell to its lowest level in more than 11 and a half years in January, amid growing concerns over a weakening labor market and rising prices.

Federal Reserve

The Federal Reserve will conclude later today its first policy meeting of 2026 to discuss the appropriate monetary policy path, with expectations firmly centered on keeping US interest rates unchanged at the 3.75% level.

The interest rate decision and policy statement are due at 19:00 GMT, followed by a press conference by Federal Reserve Chair Jerome Powell at 19:30 GMT.

Powell’s remarks are expected to provide clearer signals on the future path of US interest rates this year, particularly amid ongoing economic developments and mounting concerns over the independence of monetary policy in the United States.

Carol Kong, currency strategist at Commonwealth Bank of Australia, said markets are likely to focus more on questions surrounding the Federal Reserve’s independence than on interest rate expectations.

She added that if Powell were to step down as a governor after his term as Fed chair ends in May, it could reinforce the perception that he is yielding to political pressure, potentially heightening concerns over threats to the Fed’s independence and posing risks to the dollar.

US interest rates

• According to CME Group’s FedWatch tool, the probability of keeping US interest rates unchanged at the January 2026 meeting currently stands at 97%, while the odds of a 25-basis-point rate cut are priced at 3%.

• Investors are currently pricing in two US rate cuts over the coming year, while Federal Reserve projections point to a single 25-basis-point cut.

Gold outlook

Kelvin Wong, market analyst for Asia-Pacific at OANDA, said gold’s rally reflects its very strong indirect correlation with the US dollar. He added that Tuesday’s surge in US trading followed a casual comment by Trump in response to a question about the dollar, which hinted at a broad consensus within the White House in favor of a weaker dollar going forward.

Deutsche Bank said on Tuesday that gold prices could rise to $6,000 per ounce in 2026, citing sustained investment demand as central banks and investors increase allocations to non-dollar and tangible assets.

SPDR Gold Trust

Gold holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by about 0.85 metric tons on Tuesday, bringing total holdings to 1,087.38 metric tons, the highest level since May 3, 2022.