Bitcoin may stage a recovery above the key $90,000 psychological mark amid easing monetary inflation concerns in the world’s largest economy.

Bitcoin’s (BTC) over two-month downtrend has raised numerous alarms that the current Bitcoin bull cycle may be over, defying the theory of the four-year market cycle.

Despite widespread investor concerns, Bitcoin may be on track to a recovery above $90,000 due to easing inflation concerns in the United States, according to Markus Thielen, the CEO of 10x Research.

“We can see some counter-trend rally as prices are oversold, and there is a good chance that the Fed is mildly dovish,” Thielen told Cointelegraph, adding:

“This is not a major bullish development, rather some fine-tuning from the policymakers. We think BTC will be in a broader consolidation range but we could trade back towards $90,000.”

Bitcoin daily RSI indicator. Source: 10x Research

Investor confidence may also be improved by Federal Reserve Chair Jerome Powell’s comments indicating that the Fed will “remain on hold amid rising uncertainty among households and businesses,” wrote 10x Research in a March 17 X post, adding:

“Powell also expressed doubts about the sustained inflationary impact of Trump’s tariffs, referencing the 2019 scenario where tariff-related inflation was temporary, and the Fed eventually cut rates three times.”

Meanwhile, investors are eagerly awaiting today’s Federal Open Market Committee (FOMC) meeting, for cues on the Fed’s monetary policy for the rest of 2025, a development that may impact investor appetite for risk assets such as Bitcoin.

Related: Crypto market’s biggest risks in 2025: US recession, circular crypto economy

FOMC meeting will be crucial for Bitcoin’s trajectory: analyst

Traders and investors will be watching for any hints about the ending of the Fed’s quantitative easing (QT) program, “a move that could boost liquidity and risk assets,” according to Iliya Kalchev, dispatch analyst at Nexo digital asset investment platform.

“The upcoming Fed decision could be a major catalyst for further movements,” the analyst told Cointelegraph, adding:

“If Chair Powell spreads his dovish wings, Bitcoin could take flight on renewed bullish momentum.”

“However, persistent inflation concerns or a reaffirmation of tight financial conditions, such as elevated interest rates or continued liquidity tightening, could limit upside potential,” added the analyst.

Related: Rising $219B stablecoin supply signals mid-bull cycle, not market top

Fed target interest rate probabilities. Source: CME Group’s FedWatch tool

Markets are currently pricing in a 99% chance that the Fed will keep interest rates steady, according to the latest estimates of the CME Group’s FedWatch tool.

Still, investors have slashed their exposure to  US equities by the most on record by 40-percentage-points between February and March, according to Bank of America’s latest survey — raising concerns that recession fears may hurt Bitcoin’s price action.

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