Geopolitical factors triggered a new wave of volatility in the cryptocurrency market on May 7, leading to an unexpected turnaround for Bitcoin after a brief decline. After falling below $94,000 and setting a new May low, the first cryptocurrency demonstrated a confident recovery amid a challenging macroeconomic environment.
4-hour chart BTC/USDT. Source: cryptocurrency screener Cryptovizor
Bitcoin and gold are moving in sync
Bitcoin and gold reached local highs at $97,732 and $3,435 respectively, after which they entered a consolidation phase.
News of escalating tensions between India and Pakistan, as well as potential progress in trade talks between the US and China, supported market activity.
Traders had no time to relax in anticipation of the Federal Reserve's interest rate decision, which was expected to be announced on the evening of May 7.
While market expectations regarding the Federal Open Market Committee (FOMC) meeting were almost unanimous, there is much greater interest in the subsequent press conference of Fed Chair Jerome Powell, which will start at 21:30 MSK.
Probability of a Fed rate change on May 7. Source: Fedwatch
"The market will be watching closely for any dovish or hawkish changes in their tone, which has been quite ambiguous lately," summarized trader Daan Crypto Trades on social media X, accompanying it with data from the FedWatch Tool of the Chicago Mercantile Exchange.
Analyzing the activity in the Bitcoin order book, Keith Alan, co-founder of the trading resource Material Indicators, noted that the nearest liquidity had been "cleared" before this event.
BTC/USDT order map on Binance exchange. Source: Keith Alan
"I am pleasantly surprised that Bitcoin held above the beginning of the year level, but I wouldn’t be surprised if the price tests the entire range by the end of the week," he told his subscribers on X, pointing to the level of $93,500 as a potential target for decline.
Darkfost, an analyst at the CryptoQuant platform, noted the decrease in the probability of rate cuts in June 2025.
At the time of writing, the aggregate probability of a rate cut at the June FOMC meeting was less than 30% — significantly lower than in previous weeks.
Probability of a Fed rate change on June 18. Source: Fedwatch
"Expectations are clearly pessimistic right now," he concluded.