With the Federal Open Market Committee set to announce its monetary policy decision on May 7, Bitcoin traders face a crucial turning point, driven by macroeconomic factors, that could determine price trajectories through the summer. The Federal Reserve, led by Jerome Powell, appears likely to keep the federal funds rate at 4.25% to 4.50%; while the CME Group's FedWatch tool indicates a 98.2% probability of maintaining the stance. However, this near certainty has not alleviated the political debate. President Donald Trump and Treasury Secretary Scott Posen have publicly pressured for lower borrowing costs, yet Powell's latest public remarks on April 16 framed monetary policy as being "in a wait-and-see mode," adding that the labor market is "in good shape" but "the Federal Reserve's commitment is to keep long-term inflation expectations anchored and to ensure that a one-time increase in the price level does not become a persistent inflation problem." Indeed, the central bank continues to prioritize price stability even as leading indicators signal an economic slowdown and the possibility of a shift to easing in the second half of the year.
Preview of the Federal Open Market Committee for Bitcoin
For Bitcoin, the discussion is not about whether the Federal Reserve will hint tomorrow as much as it is about how algorithmic liquidity and speculative positions will react to Powell's press conference tone. Josh Rager, a cryptocurrency trader, told his followers on X, "Expect sharp volatility until the Federal Open Market Committee announcement tomorrow. Then after the interest rate cut announcement, expect volatility. With a reversal during Powell's speech. This is my approach to the Federal Open Market Committee right now." Although Rager's baseline assumes a final interest rate cut, his short-term focus is on sharp volatility during the day, which is typically framed around the statement window and Q&A.
The astronomer (@astronomer_zero) presented a more likely roadmap, confirming that his reversal model in the Federal Open Market Committee "consistently provides reversals over 85%. If the mechanisms continue to work this month, it means we would have peaked this week or last week before a significant drop occurs."
But it mitigates this historical advantage by indicating that the prevailing quarterly bullish trend in Bitcoin may weaken the signal: "This means that this meeting and/or the next Federal Open Market Committee meeting will have a weak counter impact amid what I expect to be a strong bullish trend."
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