Bitcoin Holds Above $64,000 Ahead of Fed Decision, Bucking AI Tech Sell-Off

Bitcoin traded higher on Wednesday, holding its ground above the $64,000 level as investors adopted a wait-and-see approach ahead of a key policy decision from the U.S. Federal Reserve. The cryptocurrency demonstrated notable resilience, recovering from an earlier dip despite a significant sell-off in artificial intelligence-related technology stocks.

As of 9:25 AM ET, Bitcoin was up 1.8% to trade at $64,220.5, according to Investing.com data. The move follows the previous session where the token briefly fell below $63,000, dragged down by a global rout in AI shares.

Fed Decision Looms Over Markets

The primary focus for investors is the Federal Reserve's interest rate decision, scheduled for later Wednesday. The uncertainty surrounding the outcome has led to cautious trading across risk assets.

According to the CME FedWatch Tool, markets are pricing in a roughly 68% probability that the central bank will hold rates steady, with a 32% chance of a 25-basis-point hike. A more hawkish-than-expected signal from the Fed could apply pressure to cryptocurrencies, while a dovish tone could bolster demand for digital assets.

Divergence from Tech Sector Weakness

While Bitcoin's correlation with broader risk assets has increased over the past year, it has diverged from the sharp downturn in the tech sector this week. The sell-off was particularly acute in Asian markets, where South Korea's KOSPI index fell sharply, driven by weakness in AI chipmakers.

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Shares of memory chip manufacturer SK Hynix plunged as much as 20%, even after the company posted record quarterly results that still fell short of high investor expectations. In contrast, Bitcoin's decline was comparatively modest, suggesting a degree of insulation from the tech valuation concerns.

Altcoins and Institutional Flows

Institutional demand for Bitcoin presented a mixed picture. While U.S. spot Bitcoin ETFs have experienced outflows in several recent sessions, they have still recorded small net inflows for the month of July overall. Investors are also closely monitoring major tech earnings this week from companies like Microsoft and Meta Platforms for insights into AI spending trends and overall market sentiment.

Other major cryptocurrencies also posted gains on Wednesday:

• Ethereum (ETH) rose 1.5% to $1,901.92.
• XRP climbed 2.3% to $1.0754.
• Cardano (ADA) saw a significant jump of approximately 5%.
• Solana (SOL) and Dogecoin (DOGE) recorded modest gains of 1.1% and 1.3%, respectively.