May 8th Federal Reserve interest rate decision: Hawkish or Dovish?

The Federal Reserve maintains the interest rate at 4.25%-4.50%, core PCE inflation at 2.8%, slightly above the 2% target, with robust employment and no signs of economic recession. The probability of not lowering interest rates in June has risen from 35% to 64%. The first rate cut may occur in July.

The cryptocurrency market has strong expectations for rate cuts, with bullish sentiment high, predicting a short-term breakthrough of 100,000. However, there are warnings about retracement risks, while institutional funds (ETFs, MicroStrategy) continue to flow in, supporting prices.

Short-term (May-July): The probability of Bitcoin breaking through 100,000 is 60%-70%. It requires the realization of rate cut expectations or continuous inflow of institutional funds. Currently in an overbought state, a pullback to 93,000-95,000 is more likely, and a breakthrough of 100,000 requires confirmation with increased volume.

Medium-term (July-December): If a rate cut is implemented in July, BTC will break through 120,000, with a year-end target of 150,000-200,000, in line with historical cyclical patterns (late-stage bull market).

The probability of the Federal Reserve maintaining interest rates unchanged in May is 97.2%, while the probability of a 25 basis point rate cut is 2.8%.