Will the Federal Reserve lower interest rates? Will Bitcoin crash?

The probability of the Federal Reserve lowering interest rates is extremely low, but volatility is huge. The market's expectations and data support the current Chicago Mercantile Exchange (CME) FedWatch Tool, which shows a 97.2% chance of maintaining the interest rate at 4.25%-4.5% in May, with only a 2.8% chance of a 25 basis point cut. The Fed's dot plot indicates two expected rate cuts in 2025, but the timing of the first cut may be delayed until July, rather than May. Powell has repeatedly emphasized that "there is no need to rush to lower rates" and has clearly stated that "policy will only be eased if the labor market weakens." Current employment data is strong, and inflation is still above the target (core PCE inflation rate of 2.6%), so the conditions for a rate cut are not mature.

Trump's pressure is ineffective, and the Federal Reserve maintains its independence. Trump has repeatedly publicly requested that the Federal Reserve immediately lower rates, but Powell has explicitly responded that "the Federal Reserve will not succumb to political pressure" and emphasized that it will focus on combating inflation. The Federal Reserve needs to balance the potential impact of tariff policies on inflation; a rate cut at this time might exacerbate inflation expectations, making it more likely to maintain the current interest rate.

Secondly, Bitcoin is unlikely to crash in the short term due to rate cut expectations, but the risk of volatility has increased. Technical support and resistance levels show that Bitcoin's current price is fluctuating around $94,500, with $92,000-$93,000 as key support levels, and $96,000-$100,000 as strong resistance levels.

If the Federal Reserve maintains the interest rate and does not release dovish signals, Bitcoin may continue to consolidate in the $92,000-$96,000 range; if it falls below $92,000, it may drop to the $88,000-$93,000 range.

Market sentiment and capital flow show that Bitcoin ETFs have seen a net outflow of $635 million for five consecutive weeks, with Grayscale Trust experiencing a record daily outflow of $167 million, indicating pressure from institutional capital outflows. However, on-chain demand has turned positive for the first time since February, and existing funds still support the price, so a direct crash due to Federal Reserve policy expectations is unlikely in the short term.

If Powell emphasizes that "inflation remains the primary risk," Bitcoin may fall to the $91,500-$92,000 support level. The uncertainty of Trump's policies: his tariff policies may exacerbate market volatility, but Bitcoin has partially absorbed that risk (e.g., falling over 9% in a single day in March due to tariff policy). Technical breakdown: If it falls below the $92,000 support level, it may trigger technical selling, increasing the risk of further decline. Tonight's interest rate decision, are you ready to face the storm?