As Bitcoin embarks on the first full week of May 2025, it grapples with maintaining its yearly open support amid a backdrop of significant economic events. The upcoming U.S. Federal Reserve’s decision on interest rates looms large, with market-watchers keenly observing potential impacts on Bitcoin’s price action. Despite recent sell pressure, optimism persists among traders—though challenges abound.
A Week of Economic Drama
Bitcoin closed last week on a slightly sour note, dipping to $93,350 on Bitstamp. Yet, the market swiftly rebounded, hinting at a bullish undertone. Traders are eyeing $96,420 as the next liquidity cluster, a figure derived from CoinGlass data. CrypNuevo, a respected trader, suggests that reaching a new local high of $98,000 could trigger further buy-ins. Meanwhile, Daan Crypto Trades points to a “gap” at $97,000 in CME Group’s Bitcoin futures, suggesting this could act as a price magnet in the coming days. As explored in Crypto Daybook Americas: All Eyes on Jobs, Fed as Bitcoin Prepares for Breakout Rally, the upcoming economic indicators could further influence this price movement.
But here’s the catch—the Federal Open Market Committee (FOMC) meeting on May 7 could upend these projections. The Fed’s stance on interest rates amid rising recession fears, bolstered by U.S.-China trade tensions, has traders on edge. President Trump’s vocal push for rate cuts adds to the drama, though the CME Group’s FedWatch Tool places the likelihood of a cut at a mere 5.2%.
Market Jitters and Economic Signals
Beyond the FOMC, Bitcoin’s sensitivity to U.S. economic indicators is on full display. The initial jobless claims report on May 8 and Coinbase’s earnings are key volatility triggers. As predictions of a recession grow louder—72% of Americans now foresee an economic downturn within a year, according to The Kobeissi Letter—Bitcoin’s price may respond to these broader economic currents. For more insights into how trade dynamics might affect Bitcoin’s trajectory, see Bitcoin Jumps Above $97K as Traders Optimistic U.S.-China Trade Deal Possible.
Mosaic Asset’s recent newsletter highlights the economic strain from trade wars, yet notes resilience in certain sectors. The S&P 500’s bounce back post-tariff announcements suggests some underlying strength. Bitcoin has mirrored this resilience, rising 15% since Trump’s tariff-related “Liberation Day” on April 2.
Bitcoin Dominance: The Final Countdown?
In the crypto sphere, Bitcoin’s dominance hit 65% over the weekend, its highest since 2021. This metric has long frustrated altcoin investors, who see Ether (ETH) struggling near 2019 levels. Rekt Capital, a prominent analyst, argues that Bitcoin’s dominance is approaching a long-term peak at 71%, a level historically associated with altseason beginnings. However, Thomas Fahrer from Apollo suggests institutional demand for Bitcoin, particularly from entities like Blackrock, may skew historical patterns.
With the Crypto Fear & Greed Index sitting in “neutral,” there’s a palpable shift in market sentiment. Santiment notes a recent uptick in social media optimism about Bitcoin, despite earlier calls for lower price targets. This shift—perhaps fueled by fear of missing out (FOMO)—could complicate Bitcoin’s quest to maintain upward momentum.
As May unfolds, Bitcoin’s path remains as uncertain as it is intriguing. The interplay between macroeconomic forces and market sentiment will likely dictate the cryptocurrency’s trajectory, keeping traders and analysts on their toes. The coming days will test Bitcoin’s resilience and provide clues about its longer-term prospects in a volatile economic landscape.
Source
This article is based on: BTC dominance due ‘collapse’ at 71%: 5 things to know in Bitcoin this week
Further Reading
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- Bitcoin Surges Past $94,000 as Institutional Interest and Market Optimism Grow
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
