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The Federal Reserve (Fed) is set to hold its FOMC meeting on May 7, 2025, drawing significant attention from cryptocurrency participants. The impending announcement regarding interest rates and comments by Fed Chairman Jerome Powell may trigger considerable volatility in Bitcoin 
$106,664 and altcoin prices. After an aggressive rate hike cycle in 2022-2023, the Fed initiated a cut in late 2024, stabilizing rates between 4.25% and 4.50%. Current market sentiment strongly anticipates rates will be maintained at these levels.
Fed’s Decision: Impact and Scenarios for Bitcoin
Inflation in the USA remains relatively elevated, with robust employment stats casting uncertainty over the Fed’s next moves. Although additional cuts could emerge later in the year, a clear roadmap is yet to be established.
Analysts suggest that if Powell adopts a “hawkish” tone, Bitcoin might retreat toward the support range of $91,500 – $92,000. Falling below this range could further deepen a corrective phase.
Conversely, a “dovish” disposition from Powell hinting at near-term rate cuts could propel Bitcoin back towards the $100,000 target. Even with core PCE inflation at 2.6%, any dovish remarks are seen as investment opportunities, prompting investors to monitor Powell’s statements closely and react swiftly.
Potential Impacts of Powell’s Address on Crypto Markets
Political influences are also in play, with Donald Trump’s call for rate reductions intensifying debates about the Fed’s independence. The expectation is for the Fed to prioritize inflation management, making the tone of the speech crucial.
Renowned crypto analyst Michael van de Poppe considers an unexpected rate reduction from the meeting unlikely due to a steady inflation rate urging caution for the Fed. Such a move could send shockwaves through both traditional and crypto markets.
Currently, advisors alert investors to avoid short-term leverage and prepare for abrupt price movements. In periods of high volatility, prudent strategies help limit risks during sudden market shifts, maintaining a patient stance until expectations become clearer.
