The Fed Reserve’s FOMC meeting on May 7, 2025, is written on the wall and will have an effect on both traditional and digital assets’ markets. Interest rates are expected to be held steady at 4.25%–4.50%, but everyone will be watching what Fed Chair Jerome Powell says.
The central bank has a 94 percent probability of keeping current rates, according to the CME Group’s FedWatch Tool. Although rate cuts began in late 2024, inflation is still above the Fed’s target, making the timetable for more easing unclear.
Core PCE inflation is at 2.6%, and recession probabilities are close to 60%—a combination that has policymakers walking a tightrope between tightening and providing stimulus.
Bitcoin Up 1%, Besting Equity Gains Ahead of June Policy Reveal
This week, Bitcoin traded at around $94,600 on May 6, 2025, after slight movements in the last few days. Institutions are conflicted about Bitcoin—the BlackRock Bitcoin ETF attracted an inflow of $531.2 million on May 5, representing aggressive accumulation, while Fidelity reported $57.8 million in outflows on May 6, indicating a tactical exodus before the FOMC decision.
“If Powell is hawkish, $BTC short-term down to 91.5-92 before rebound,”
Anderson said. Conversely, dovish tones or mentions of rate cuts could derail bullish momentum (as we saw earlier last week) and push Bitcoin towards the $100,000 region once again.
What the Crypto Analysts Say About What Could Happen Next
Crypto analyst Michaël van de Poppe stressed that a rate cut is improbable at the May FOMC meeting, saying that inflation will take the edge off of the easing at this point. But he said that if the Fed does anything different, whether it’s a surprise interest rate cut or an unexpectedly dovish message,
“it would be a shock across all markets.”
Bitcoin is at an inflection point. Powell’s words are going to determine if the rally continues or if a deeper correction begins. Baldwin highlighted increased recession risks as well as sticky inflation that also helped ratchet up sensitivity to Fed policy direction.
Geopolitical Pressure and the Hand of Politics Complicate Matters
Former president Donald Trump is still calling for rate cuts to neutralize economic headwinds from higher tariffs. That said, the Fed has been solid in defending its independence, with officials maintaining that monetary policy still will be dedicated to managing inflation rather than politicians’ whims.
Increased concerns about fiat instability and escalating geopolitical tensions continue to renew interest in assets that are not controlled by a central authority, such as Bitcoin. A lot of individuals now view BTC as a hedge toward economic uncertainty, particularly in these times of macro policy mistakes or more macro shocks.
Price Prediction: Hope, Despite Uncertainty.
Data offered by major platforms further forecasts a relatively optimistic trajectory for Bitcoin price with no shock tightening from the Fed:
Source | BTC Price Prediction for May–June 2025 | Notes |
Changelly | $104,496.63 | Predicts 10.83% increase from current levels |
CoinCodex | $104,870 | Suggests 15.40% growth in short term |
Coinpedia | $98,000 (High) / $76,000 (Low) | Expects average price near $84,000 |
Finance Magnates | $120,000–$200,000 (End of Year) | Long-term bullish outlook |
On-chain Stats and Community Sentiment
Blockchain tracking companies have noted higher wallet activity and a stable hashrate to indicate that long-term holders still see value in the face of near-term price volatility. Some traders believe a post-FOMC breakout is incoming, while others are preparing for a pullback if Powell takes a more hawkish line.
Meanwhile, on-chain data indicates that more and more Bitcoin addresses continue to hold more than 1, and the number of these addresses is still increasing, suggesting that people are accumulating during times of uncertain macroeconomics.
Trade Krakow Antivigilance Prior to Powell Speech
According to Reddit With Powell’s remarks in the past having moved markets quickly one way or the other, as history, analysts warn traders to use lower leverage and tight risk controls, regardless of how the market reacts. Next May 10 options expiry is also likely to bring about some volatility in markets, particularly if Powell’s comments are at odds with the current consensus.
A Critical Moment for Bitcoin and Monetary Policy
With rates expected to be left unchanged, it is the tone of Powell’s comments that will carry significant influence over the near-term direction for risk asset prices. Whether the Fed hints at patience or caution or something even more surprising, markets are built for action.
Bitcoin is now at a technical and psychological crossroads. A dovish tone would likely confirm bulls’ targets around $100,000 and over; a hawkish message might strengthen resistance and cause selling to flood back into the market. Macro headwinds are colliding with policy uncertainty in the days ahead.
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Frequently Asked Questions
1. How might the May 7 FOMC meeting affect Bitcoin price?
Bitcoin could fall to $91K or blast past $100K if the Fed is hawkish or dovish in its tone. However, how the Fed’s words will be interpreted by investors could usher in either a drop to $91K or a push past $100K.
2. What matters about Jerome Powell’s speech for crypto traders?
Powell’s address, ready or not, brings with it potentially far-reaching impact on the sentiment, volatility, and delivery of the crypto marketplace and near-term support and resistance for Bitcoin.
3. Will there be a May 7 Fed FOMC?
Analysts expect no rate cut in light of ongoing inflation. An unannounced cut would surprise markets and probably cause sudden price spikes in Bitcoin.
4. How can crypto investors prepare for the Fed announcement?
Traders should look to deleverage, track ETF flows, and prepare for speculation around Powell’s commentary and macroeconomic guidance.
Glossary of Key Terms
1. FOMC (Federal Open Market Committee) You do have it correct, but it makes no sense.
US Federal Reserve’s policy-making body that decides on interest rates and also provides guidance on the national monetary policy, affecting asset markets such as possible impact on cryptocurrencies.
2. Interest Rate Decision
A policy move by the Fed changing the cost of borrowing in the economy. Rate adjustments also have an impact on liquidity in the markets, investment flows, and asset valuations — including for Bitcoin.
3. Hawkish vs. Dovish
“Hawkish” means to be in favor of higher interest rates to fight inflation; “dovish” implies an inclination toward rate cuts or other monetary easing to promote growth. Together, they should influence Bitcoin sentiment.
4. Bitcoin Support and Resistance
Support represents a price level at which sufficient buying interest exists to prevent the price from declining further, while resistance is a price level at which selling interest is strong enough to prevent price increases. Key in technical analysis.
5. Core PCE Inflation
The PCE Price Index excluding food and energy. It’s the Fed’s preferred inflation gauge, and is used to help guide interest rate policy.
6. Recession Odds
A statistical probability that the economy will shrink over some period of time. Increasing odds can also put pressure on risk-averse behavior or Bitcoin hedging.
7. ETF Flows
Flows into or out of exchange-traded funds. Inflows into Bitcoin ETFs trace institutional buying; outflows, we can infer, may be a sign of bearish sentiment or risk management.
8. Monetary Policy Guidance
Guidance communication by central banks on the expected paths of interest rates or the economic outlook. It’s a major factor in driving market responses and volatility.