Key Notes
- Bitcoin price has increased to $97,771 ahead of the Federal Reserve's policy decision.
- The Fed is expected to hold rates despite inflation remaining at 3.5%.
- Jerome Powell’s tone will likely influence BTC’s near-term direction.
The price of the largest cryptocurrency, Bitcoin, is hovering near key resistance levels as global markets await the U.S. Federal Reserve’s interest rate decision, expected later today. With economic uncertainty growing and inflation still a concern, traders are on edge.
All eyes are on Fed Chair Jerome Powell’s upcoming statement, which may influence Bitcoin’s direction over the coming weeks.
Investors Brace for Powell’s Remarks as Bitcoin Climbs
Bitcoin rose to $96,921.96 on May 7, moving closer to the key $100,000 threshold . The rally comes as traders position themselves ahead of the Federal Open Market Committee (FOMC) announcement.
While the market widely expects the Fed to hold interest rates steady at 4.33%, attention has shifted to the tone and detail of Chair Powell’s 2 P.M. EST press conference.
It is worth mentioning that over the past several months, Bitcoin has increasingly reacted to macroeconomic data and central bank signals, especially after the approval of spot Exchange-Traded Funds.
Institutional interest has risen, tightening Bitcoin’s link with traditional financial markets. As a result, monetary policy updates now carry more weight for Bitcoin than ever before.
The United States economy declined during the first quarter of 2025, showing signs of weakness after a stronger finish to 2024. Real GDP fell by 0.3%, and consumer spending slowed sharply.
At the same time, inflation has remained persistent. The core Personal Consumption Expenditures (PCE) price index, a key inflation measure for the Federal Reserve, increased to 3.5%, well above the central bank’s 2% target.
These numbers place the Fed in a difficult spot. While slowing growth usually prompts a rate cut, rising inflation and new trade tariffs make it harder for the central bank to shift toward easier policy. According to a CNBC Fed Survey, most economists believe the Fed will need to cut rates eventually. However, for now, Polymarket data suggests a 2% chance of a rate cut today.
Bitcoin Faces Key Levels as Traders Watch for Clues
Bitcoin’s next move may depend entirely on Powell’s tone. If the Fed acknowledges economic weakness and signals a willingness to ease policy later in the year, Bitcoin could break above the $98,000 resistance and retest all-time highs. Some analysts believe it may push beyond $100,000 if dovish guidance and ETF flows align.
However, a more hawkish stance focusing on inflation risks could lead to a drop. Support is currently seen at the $92,000 to $94,000, with further downside possible if traders sell on disappointment. A neutral or vague statement could also cause price swings, especially given the thinner liquidity typical around Fed events.
Meanwhile, two long-dormant Bitcoin wallets from 2013 recently transferred $325 million worth of BTC ahead of the Federal Reserve’s impending interest rate decision.
For now, traders remain cautious. With Bitcoin at a critical juncture and the Fed’s decision just hours away, the market is bracing for heightened volatility.
nextDisclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
