According to current market expectations and relevant analyses, there is a possibility of an interest rate cut at the Fed meeting on May 8, 2025, but no clear consensus has formed yet. According to Xueqiu's data, as of March 7, 2025, the market expects a 66.9% probability that rates will remain unchanged on May 8, and a 31.4% probability of a 25 basis point cut, which is an increase of 10% from last week. Additionally, according to Investing.com data, as of May 3, 2025, the market expects a 97.3% probability that the meeting will keep rates at 4.25%-4.50%, and a 2.7% probability of cutting to 4.00%-4.25%.
In summary, although the probability of a rate cut in May has increased, the current market expectations still lean towards maintaining the current interest rate. If economic data continues to improve and inflation remains stable, the Fed may delay rate cuts to June or later, as the probability of a June rate cut is higher, reaching 51.3%.
About the cryptocurrency market trend in May 2025
According to CryptoQuant's analysis, the Bitcoin market is currently at a critical turning point, with its 'Net Unrealized Profit and Loss (NUPL)' and 'Market Value to Realized Value (MVRV)' ratio around 0.8, in the 'beginning of an uptrend' range. Here are three possible market trends:
1. Optimistic scenario: If the NUPL/MVRV ratio can break through and maintain above 1.0, Bitcoin prices may reach between $125,000 and $150,000 in the third quarter of 2025. However, this scenario requires sustained market optimism and capital inflows.
2. Basic scenario: Bitcoin prices may fluctuate between $90,000 and $110,000, during which the ratio varies between 0.8 and 1.0, reflecting a balance between capital accumulation and profit-taking among market participants.
3. Pessimistic scenario: Bitcoin prices may fall back to between $85,000 and $88,000, which could be due to a shift in market sentiment to pessimism or negative impacts from macroeconomic factors (such as Fed policy).
Influencing factors
• Fed policy: If the Fed cuts rates in May, it may inject more liquidity into the market, thereby positively impacting the cryptocurrency market.
• Market sentiment: The current holdings of long-term holders have fallen to the lowest level of the year, indicating reduced selling pressure, which is a bullish signal for the market.
May market trend forecast:
Short-term volatility: Due to the low probability of interest rate cuts in May, and the market's rising expectations for the Fed to cut rates in June or July, the cryptocurrency market in May may exhibit fluctuations. Investors may be waiting for clearer signals of interest rate cuts or favorable policies (such as Bitcoin reserve executive orders).
Potential positives: Trump's support for cryptocurrencies (such as promoting Bitcoin as a strategic reserve) may boost market sentiment. If relevant policies make positive progress at the beginning of May, it could drive a rebound in the prices of mainstream cryptocurrencies like Bitcoin.
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