With the Federal Open Market Committee (FOMC) set to unveil its policy decision on May 7, Bitcoin traders are at a significant crossroads that could steer the course of price trends into the summer months. The Federal Reserve, led by Chairman Jerome Powell, is expected to maintain the fed-funds corridor at 4.25 to 4.50 percent, a prediction supported by a 98.2 percent probability from CME Group’s FedWatch tool. However, political turbulence remains despite this near certainty.
Donald Trump and Treasury Secretary Scott Bessent have been vocal about their desire for reduced borrowing costs. Yet, Powell’s public comments on April 16 framed monetary policy as “in a wait-and-see mode,” asserting that while the labor market is “in decent shape,” the Fed’s “duty is to ensure longer-term inflation expectations are firmly anchored and to prevent a one-time price level increase from becoming a persistent inflation issue.” This suggests that the central bank continues to prioritize price stability amidst signs of a slowing economy and a potential shift to easing in the latter half of the year.
For Bitcoin, the discussion is less about whether the Fed will change course and more about how algorithmic liquidity and discretionary positioning will respond to Powell’s press conference. Crypto trader, Josh Rager, advised his followers to “Expect chop until FOMC tomorrow. Then after the rate cut announcement, expect volatility. With a reversal during Powell’s speech. That’s my FOMC playbook at the moment.”
Astronomer (@astronomer_zero) provided a more probabilistic perspective, highlighting that his patented FOMC-reversal model has “consistently predicted reversals with over an 85 percent chance. If the trend continues this month, we could see a significant downswing.”
However, he also cautioned that the ongoing quarterly uptrend in Bitcoin could dilute the signal. Columbus (@columbus0x) has his eyes on the microstructure for verification. Should Powell adopt a hawkish tone, Columbus anticipates “a deviation below the range low / a retest of the 200-day SMA, closing the CME gap between $91.8k and $92.4k – or possibly even dipping into the high $80’s. Nonetheless: the trend is up.”
As of the press time, BTC is trading at $94,097. The critical determinant will be Powell’s forward-guidance language and its effect on terminal-rate pricing. Tomorrow’s decision might appear binary on the surface, but the real story lies in the market’s reaction to the Fed’s near-term inflation mandate.
