Bitcoin (BTC) Awaits Fed Decision: Bullish or Bearish?

Updated

May 7, 2025

Gambar Bitcoin (BTC) Awaits Fed Decision: Bullish or Bearish?

Jakarta, Pintu News – Bitcoin is currently holding at $94,350 ahead of tomorrow’s crucial Federal Open Market Committee (FOMC) meeting. Traders are bracing for extreme price fluctuations as the Federal Reserve considers stubborn inflation amid the White House’s push for interest rate cuts.

CME’s FedWatch tool shows a 98.2% probability that rates will remain unchanged, while technical indicators point to a potential spike to $100,000.

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Fed Chair Dilemma: Stubborn Inflation vs. White House Pressure

Federal Reserve Chairman Jerome Powell faces a dilemma between political pressure and economic reality. Although the White House has been increasingly vocal about the need for a rate cut, Powell has stuck to a “wait and see” approach. A former top Fed official who worked alongside Powell emphasized that the decision to cut interest rates will not be based solely on economic forecasts.

The Fed needs tangible evidence of a decline in employment data before making a move. The Fed Watch tool currently shows a strong consensus that rates will remain at 425-450 basis points tomorrow. This suggests that Powell is prepared to wait longer. It also highlights the mismatch between market expectations and political pressures.

On the other hand, stubborn inflation data continues to complicate the Fed’s decision-making process, which will be a key topic to watch in the FOMC meeting on May 7.

Treasury Buyback Program & Recession Signals: Mixed Messages for Bitcoin

In a significant but under-reported development, the Fed announced a $5 billion per month Treasury repurchase program effectively maintaining its position as a net buyer.

These technical adjustments limit long-end yields despite rising short-term interest rates, creating complex yield curve dynamics that Bitcoin (BTC) traders are still coming to grips with. The economic outlook remains uncertain. Recession probability models now show a 57% chance of economic contraction by 2025 – better than last week’s reading of 63%, but still very high.

This uncertainty and the potential impact of the Trump administration’s tariffs create a challenging backdrop for risk assets like Bitcoin (BTC).

Also read: 3 Altcoins that Gained Over 100% After Donald Trump’s ‘Liberation Day’

Technical Overview: Bitcoin (BTC) Critical Level Identified

The latest Bitcoin (BTC) price action shows uncertainty. Ideally, investors should wait for explicit confirmation of the formation of support – specifically, the formation of a series of higher lows and an increase in buying volume near the $93,000 threshold or a significant surge in selling volume without price followers.

If Bitcoin (BTC) cannot hold $93,000, it will likely drop lower to test the next value area between $81,000 and $88,400. Bitcoin (BTC) consolidates between March 2025 and early April 2025. This zone could provide tremendous buying opportunities, hinting at a bullish Bitcoin (BTC) price forecast for those patient enough to wait it out.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities have high risk and volatility, always do your own research and use cold cash before investing. All activities of buying and selling bitcoin and other crypto asset investments are the responsibility of the reader.

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