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Bitcoin Drops From $97,000 Awaiting Fed Rate Decision

Coin WorldWednesday, May 7, 2025 11:55 am ET

1min read

Bitcoin (BTC) approached $97,000 on Tuesday but faced resistance and declined. This movement comes as markets brace for a potentially volatile period, with the U.S. Federal Reserve scheduled to announce its interest rate decision later in the day.

Most market participants anticipate a pause in rate hikes. Additionally, comments from Federal Reserve Chair Jerome Powell will be closely watched, as his guidance could influence risk sentiment moving into the second half of the week.

On a broader scale, recent GDP data showed a negative figure, raising concerns about the underlying economic momentum. In such an environment, it is unlikely that the Fed will make any significant moves. Inflation, trade imbalances, and ongoing uncertainty in tariff negotiations are making policymakers very cautious. The market is optimistic about the overall outlook, but any shift in the central bank's tone could test this sentiment.

From a technical perspective, Bitcoin has been on a steady rise since mid-April, driven by the overall market strength and positive news about U.S.-China trade talks. The recent rejection near $97,000 places BTC at the upper end of its local range, similar to the consolidation periods seen during 2021-2023.

Historically, May has been a favorable month for both crypto and equity markets, despite the adage "Sell in May and go away." Over the past decade, May has only had one negative return, suggesting that the upward trend may continue. With BTC currently trading just below $97,000, all eyes are on the Fed's statement.

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