Bitcoin’s roller-coaster ride continues as the cryptocurrency attempts to breach the $98,000 mark amidst growing pessimism about potential interest rate cuts by the U.S. Federal Reserve in 2025. On May 7, market volatility spiked as traders braced for the Federal Open Market Committee (FOMC) meeting, where all eyes are on Fed Chair Jerome Powell’s statements.
Volatility Reigns as Bitcoin and Gold Move in Tandem
Bitcoin and gold have been dancing a delicate waltz, mirroring each other’s movements on short timeframes as macroeconomic conditions stir the pot. The recent dip of Bitcoin under $94,000 set fresh lows for the month, only for the digital asset to rebound to a local high of $97,700. Gold, in step, reached $3,435 before both assets began to consolidate. This synchronized motion underscores a broader market uncertainty fueled by geopolitical tensions and evolving trade talks. For more on the potential impact of trade negotiations, see Bitcoin Jumps Above $97K as Traders Optimistic U.S.-China Trade Deal Possible.
The headlines are buzzing with news of escalating tensions between India and Pakistan, while whispers of progress in U.S.-China trade negotiations add another layer of complexity. “This reaction to US-China trade talks being scheduled tells you all you need to know. A LOT is already priced-in here,” tweeted The Kobeissi Letter, encapsulating the market’s jittery sentiment.
Federal Reserve in Focus
As traders hold their breath for the Fed’s decision later today, the atmosphere is charged with anticipation. While consensus suggests no immediate rate changes, the market’s attention is fixated on any shifts in tone from Powell. Daan Crypto Trades summed it up succinctly, highlighting the market’s eagerness to decipher dovish or hawkish undertones that could sway trading strategies.
Keith Alan, co-founder of Material Indicators, painted a vivid picture of the current trading landscape: “Pleasantly surprised BTC held above the yearly open, but won’t be surprised if price round trips the range before the end of the week.” His remarks point to the $93,500 level as a critical threshold, hinting at potential volatility ahead.
Pessimism on Rate Cuts Clouds the Forecast
Adding to the complexity, the outlook for rate cuts in 2025 has taken a decidedly pessimistic turn. Darkfost, a contributor to CryptoQuant, observed a significant decline in the odds of a rate cut at the June FOMC meeting, now pegged at around 30%. This shift in sentiment could spell heightened volatility for Bitcoin, as any unexpected rate adjustments might unsettle investors. For a contrasting perspective, see our recent coverage of Bitcoin price about to ‘blast’ higher as Fed rate cut odds jump to 60%.
“Expectations are clearly pessimistic for now,” Darkfost noted, cautioning that any decision to cut rates could trigger market turbulence and investor unease, depending on the magnitude of the change.
As the market digests these developments, Bitcoin traders are left grappling with the implications of geopolitical tensions, central bank policies, and the inherent unpredictability of the cryptocurrency market. The path forward remains as uncertain as ever, with Bitcoin’s trajectory closely tied to the broader economic narrative. Whether it can sustain its upward momentum or faces another corrective phase hinges largely on the signals emanating from today’s FOMC meeting. For now, traders must remain vigilant, ready to pivot as new information unfolds.
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This article is based on: Bitcoin pushes for $98K as 2025 Fed rate cut odds flip 'pessimistic'
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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.
