Bitcoin is heading into the Federal Reserve's most important meeting in years — and the market is already getting nervous.

As I write this, traders are pricing in roughly a 92% probability of a 25-basis-point rate hike, according to the CME FedWatch Tool. That would take the federal funds target range to 3.75%-4.00% and mark the first Fed increase since July 2023.

And Bitcoin is not exactly entering the meeting from a position of strength.

BTC has fallen toward the $75,000 area, while Treasury yields have surged above 5%. At the same time, oil prices have climbed sharply, adding another layer of inflation anxiety to an already complicated macro environment.

So the question is no longer simply:

Will the Fed hike?

The market increasingly thinks it will.

The real question is:

What comes next?

Bitcoin Is Already Feeling the Pressure

One of the most interesting aspects of today's setup is that Bitcoin is weakening before the Fed announcement.

That matters.

A 25-basis-point hike is increasingly priced into markets, so the immediate shock may be smaller than it would normally be. But Bitcoin traders are clearly worried about the possibility that today's move is not an isolated response to inflation.

Instead, it could mark the beginning of a new tightening phase.

And that is where things become much more complicated for risk assets.

Higher rates generally mean tighter financial conditions, more expensive borrowing and less appetite for speculative assets. Bitcoin has repeatedly behaved like a high-beta risk asset during periods of aggressive monetary tightening.

This time, there is another problem.

Inflation has not disappeared.

Energy prices are making the situation even more uncomfortable, with crude oil recently moving above $100 per barrel and contributing to renewed concerns about persistent price pressures.

That creates a difficult combination for investors:

higher inflation + higher oil + higher Treasury yields + tighter monetary policy.

Not exactly the environment Bitcoin bulls were hoping for.

The Rate Hike May Be the Easy Part

Paradoxically, the Fed's decision itself may not be the biggest market-moving event.

The market already expects the hike.

What could create much larger volatility is the updated economic projections, the dot plot and, especially, Kevin Warsh's press conference.

The Federal Reserve is scheduled to announce its decision on September 16, followed shortly afterward by Warsh's press conference.

Investors will be looking for one key signal:

Is this a one-off hike, or the beginning of something bigger?

A more aggressive dot plot could change the entire narrative.

If Fed officials signal that another hike remains possible later this year, including at the December meeting, markets could interpret today's move very differently.

Instead of seeing a single adjustment caused by an inflationary energy shock, investors could start pricing in a renewed tightening cycle.

And that would be a very different environment for Bitcoin.

The $70,000 Level Is Becoming Critical

For Bitcoin, there is now a number that keeps getting more important:

$70,000.

BTC is currently hovering considerably above that level, but the distance is shrinking after the latest sell-off.

A sustained move below $70K would put Bitcoin's recent structure under significantly more pressure, particularly if it is accompanied by continued outflows from spot Bitcoin ETFs.

That combination would be much more concerning than a simple intraday dip.

On the other hand, if Bitcoin manages to hold above $70,000 despite a hawkish Fed message, it could tell us something equally important: perhaps the market has already absorbed much of the monetary-policy shock.

That's why I wouldn't focus only on today's candle.

The real signal could come from Bitcoin's reaction after the Fed has spoken.

The Market Is Waiting for One Sentence

This is what makes today's FOMC meeting so fascinating.

The rate decision may be almost completely priced in.

But guidance isn't.

One sentence from Warsh suggesting that further tightening could be necessary might send yields and the dollar higher and put additional pressure on Bitcoin.

A more cautious tone could produce the opposite reaction.

This is why the next few hours may be more important for Bitcoin than the 25-basis-point hike itself.

And after the rejection of the CLARITY Act in the Senate, the crypto market is already dealing with another source of uncertainty. Bitcoin has effectively lost one potential positive catalyst just as macroeconomic pressure is increasing.

My Take

I'm watching three things from here:

Bitcoin at $70,000.

Spot ETF flows.

Warsh's guidance on future rate hikes.

If BTC holds $70K while ETF demand stabilizes, the current sell-off could eventually prove to be another macro-driven shakeout.

But if Bitcoin breaks $70K decisively while investors pull money from spot ETFs and the Fed signals more tightening ahead, the market could enter a much more fragile phase.

For now, the Fed has markets' full attention.

And Bitcoin traders know that the most important number today may not be the rate itself.

It may be the number of hikes still to come.