Bitcoin (BTC) is taking a breather, experiencing selling pressure after Tuesday’s indecisive price action marked by a Doji candle. This seems to be a classic case of traders de-risking in anticipation of an expected hawkish Fed rate cut later Wednesday.

The leading cryptocurrency by market value traded around $103,750, marking a 2% drop for the day, according to TradingView and CoinDesk data. Prices had surged to a record high of over $108,000 on Tuesday but failed to maintain those gains, ending the UTC day flat. That formed a ‘doji,’ a candlestick pattern that signifies indecision and potential bullish exhaustion when seen at record highs.

As expected, bitcoin’s decline has resulted in even larger losses for alternative cryptocurrencies, but some majors, such as XRP, SOL, and ETH, are experiencing losses comparable to BTC.

The Fed will announce the rate decision, the interest rate dot plot, projections, and economic forecasts at 14:00 ET. Fed Chair Jerome Powell’s press conference will be held a half hour later.

The consensus is that the Fed will cut rates by 25 basis points to the 4.25% to 4.5% range, marking a total easing of 100 basis points since September. But, the dot plot is expected to show fewer rate cuts for next year.

“The risk of slightly stronger near-term growth with the threat of higher inflation – tariffs putting up prices of goods and immigration controls potentially lifting wages and costs in the likes of agriculture, construction and hospitality sectors – means that we expect them to signal only three rate cuts in 2025. Previously, they had suggested four,” analysts at ING said in a note to clients.

“We look for 25bp of cuts per quarter in 2025 with a terminal rate of around 3.75% in the third quarter,” analysts added, noting the possibility of the Fed revising their projections for economic growth and inflation.

These so-called hawkish expectations are likely fueling the de-risking in the crypto market that is looking for reasons to correct, having seen prices for BTC soar from $70,000 to over $100,000 in less than two months.

It’s important to note that fewer rate cuts do not necessarily mean tightening; easing is still on the table. This suggests that the path of least resistance for risk assets remains tilted toward the upside.