This week can be called the 'global central bank super week', the crypto market is about to face four major events:
On Monday at 20:30, the New York Fed Manufacturing Index will be announced (expected -16, previous value -16).
On Tuesday, the Bank of Japan's interest rate decision will be announced, expected to maintain the rate at 0.5%, but the bond purchase plan may see slight adjustments.
On Wednesday at 20:30, the number of initial unemployment claims in the U.S. will be announced (expected 242,000, previous value 248,000).
On Thursday at 02:00, the Federal Reserve FOMC decision will be announced along with Powell's speech (the market expects a 61.7% probability of a 25 basis point rate cut).
2. Unraveling: How key data affects cryptocurrency prices
If the New York Fed Manufacturing Index continues to shrink, for instance remaining around -16, the market will become more concerned about an economic recession, and the Fed may be forced to accelerate rate cuts.
This index has a 0.72 correlation with Bitcoin over 60 days; if it falls below -20, Bitcoin may possibly surge to $110,000 in the short term.
Although the Bank of Japan is keeping interest rates unchanged, adjustments to the bond purchase plan will cause fluctuations in the yen.
If the pace of reduction slows, the pressure for arbitrage trading to close positions will be small, and yen depreciation may bring capital to the crypto market; if the reduction accelerates and the yen appreciates, Asian capital may flow back to traditional markets.
If the number of initial unemployment claims exceeds 250,000, the market will start the 'recession trade', and safe-haven assets like gold and Bitcoin will rise together.
After the data release in April 2025, Bitcoin rose by 8% in one day; this number must be closely monitored this week.
Regarding the Fed's decision and Powell's speech, if a rate cut of 25 basis points meets expectations, Bitcoin may stabilize at $105,000. However, if the dot plot indicates 'only one rate cut this year', it may lead to a 'buy on the rumor, sell on the news' situation.
If interest rates are maintained, Powell emphasizes 'anti-inflation priority', Bitcoin may test the support level of $98,000.
If a signal for 'early rate cuts' is released, Bitcoin is expected to break through the historical high of $120,000.
3. Practical Strategy: How traders should respond to this wave of storm
In terms of strategy, pre-position options hedging by buying a $100,000 Bitcoin put option (premium around 3%) to guard against black swan events.
Pay close attention to capital flows; changes in BlackRock's Bitcoin ETF (IBIT) holdings will significantly impact the short-term direction. If daily inflows exceed $500 million, it may trigger a short squeeze.
We must also be wary of extreme sentiment; the current Fear and Greed Index is at 74 (in the greed range). If it breaks above 80 after the decision, we need to be cautious of a pullback risk.
Crisis coexists with opportunity
This week is the most critical week for the crypto market in 2025, and the Fed's decision may become a dividing line for bulls and bears. Historical data shows that during similar 'central bank super weeks', Bitcoin's volatility can average up to 40%.
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