Bitcoin rose above $89,000 on Wednesday but remained largely range-bound, as investors weighed a weaker dollar and rising gold prices against caution ahead of a key U.S. Federal Reserve policy decision due later in the day.
The world's largest cryptocurrency was trading up 1.1% at $89,235.8 at 09:07 Saudi time.
Bitcoin remains range-bound amid caution over the Fed
Bitcoin received a boost from widespread dollar weakness after US President Donald Trump downplayed concerns about the greenback's decline.
The dollar hovered near its lowest level in four years, while gold continued its meteoric rise to new record highs above $5,200 an ounce, boosting demand for alternative stores of value.
Despite those positive factors, Bitcoin struggled to maintain a decisive breakout, trading in a narrow range around $88,000-$89,000.
Positioning remained light as traders awaited clarity from the Fed, with risk appetite constrained by uncertainty over the near-term path of US interest rates and the central bank's independence.
The Federal Reserve is widely expected to leave interest rates unchanged at the conclusion of its policy meeting later on Wednesday.
Investors will be closely watching the accompanying statement and comments from Chairman Jerome Powell for clues about when interest rate cuts might begin, especially as signs emerge that inflation is easing while economic growth remains resilient.
Low interest rates typically support non-yielding assets like Bitcoin by reducing the opportunity cost of holding them.
Adding another layer of uncertainty, traders are also closely monitoring developments related to Trump's expected appointment of a new Federal Reserve chair. Investors are assessing how political influence could reshape the Fed's policy framework and its tolerance for inflation.
Cryptocurrency prices today: Altcoins see modest gains
Most alternative currencies also rose on Wednesday, tracking Bitcoin's gains.
Ethereum, the world's second-largest cryptocurrency, rose 2.6% to $3,006.92.
XRP, the world's third-largest cryptocurrency, rose 1.1% to $1.92.
Solana rose slightly, while Cardano and Polygon each gained 1.5%.
Among the meme currencies, Dogecoin rose by 2.5%.
