At the FOMC (Federal Open Market Committee) meeting held on May 7, 2025, the Federal Reserve once again kept its benchmark interest rate steady at 4.25%–4.50%. This marks the third consecutive time the Fed has opted not to adjust rates, signaling a cautious stance amid growing uncertainty in the U.S. economy.
Reasons Behind the Decision
Fed Chair Jerome Powell stated that President Trump’s tariff policy is a major concern. The tariffs imposed on imported goods are seen as potentially increasing inflation and unemployment, putting further pressure on an already slowing economy. This is reflected in the 0.3% contraction in GDP for Q1 2025, signaling a weakening growth trend.
Market Reaction
The decision to hold rates was welcomed by the stock market. The S&P 500 rose by 0.4%, the Dow Jones gained 0.7%, and the Nasdaq edged up 0.3%. However, on a weekly and yearly basis, all three indexes remain in negative territory, reflecting investor concern over medium-term growth prospects.
The Fed’s Cautious Stance
Despite not lowering interest rates, Powell emphasized that the Fed continues to monitor signs of economic slowdown and inflationary pressure. With GDP shrinking 0.3% in Q1 and consumer sentiment declining, fears of stagnation or recession are rising. Powell is also facing political pressure from President Trump to loosen policy more aggressively.
Liquidity and Scarce Assets in Focus
Although no official easing was announced, markets interpreted the Fed’s $20.5 billion Treasury purchase on May 5 as a liquidity injection. Historically, such moves support growth in risk assets, including crypto. Declining Treasury yields, a weakening dollar (DXY < 100), and rising gold prices further bolster the narrative of Bitcoin as a hedge against inflation and uncertainty.
Bitcoin Eyes the $100K Target
A nearly 3% rise pushed Bitcoin above $96,000. With the Fear & Greed Index jumping to 67, analysts see strong investor optimism. If current macro trends persist — including weakening confidence in the U.S. dollar, global currency devaluation, and expanding liquidity — BTC is believed to be capable of breaching $100,000 soon.
Caution: Could This Be a Relief Rally?
Historically, post-FOMC gains often turn out to be "relief rallies" or dead cat bounces before further corrections. The May–September period has traditionally shown high volatility or even declines in crypto markets. Examples include:
May 2021: Bitcoin plunged from ATH to below $30K.
May–June 2022: Major correction due to high-rate fears and the Terra/LUNA collapse.
May–August 2023: BTC moved sideways under pressure from macro news.
Despite bullish macro narratives like liquidity and dollar weakness, the market may still be "searching for direction," and the current rise could present a profit-taking opportunity ahead of a potential deeper correction — especially since BTC has already rallied significantly post-April 2024 halving.
📊 Current Price Snapshot
Bitcoin is currently trading around $97,350, up approximately 2.14% from the previous day.
🔍 Analysis
1. Chart Pattern & Momentum
BTC recently broke out of a descending channel and pennant pattern, signaling bullish momentum.
However, low trading volume raises caution about the trend’s strength.
2. Support & Resistance Levels
Strong Resistance: $100,000 and $107,000
Key Support: $92,000 and $85,000
These levels are crucial for monitoring potential reversals or continuation of the current trend.
3. Sentiment Indicators
The Fear & Greed Index sits at 67, indicating "greed" or high optimism in the market.
Coinbase Premium shows a drop of -5.07, hinting at potential selling pressure from U.S. investors.
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📈 Short-Term Projection
Some analysts predict BTC could reach $107,223 in the coming days if the current momentum continues.