As the Federal Open Market Committee prepares to unveil its policy decision on May 7, Bitcoin traders find themselves at a crucial macroeconomic juncture that may significantly shape market dynamics into the summer. Under the stewardship of Chair Jerome Powell, the Federal Reserve is widely expected to maintain the fed-funds corridor at 4.25 to 4.50 percent, with CME Group’s FedWatch tool assigning a 98.2 percent probability to this unchanged stance. However, the atmosphere is rife with political pressure.
Prominent figures such as President Donald Trump and Treasury Secretary Scott Bessent have openly called for lower borrowing costs. Yet, Powell’s latest comments on April 16 characterized monetary policy as being in a “wait-and-see” mode, emphasizing the Fed’s commitment to anchoring long-term inflation expectations. Despite indications of a cooling economy, the Fed remains focused on price stability, which could imply a pivot to easing measures in the latter half of the year.
FOMC Preview: Implications for Bitcoin
For Bitcoin, the key question pivots on the market’s reaction to Powell’s press conference rather than the Fed’s immediate decisions. Crypto trader Josh Rager remarked on the volatility expected post-announcement, stating, “Expect chop chop until FOMC tomorrow. Then, after the rate cut announcement, expect volatility. A reversal during Powell’s speech is likely.” Although Rager’s base assumption anticipates eventual rate reductions, his immediate focus centers on the intraday fluctuations typical during the statement-and-Q&A period.
Astronomer (@astronomer_zero), known for his FOMC-reversal model, has reported a strong historical accuracy rate of over 85 percent for predicting reversals. He suggests that if these mechanisms hold, Bitcoin may have peaked recently before undergoing a substantial decline. However, he also highlights the current quarterly uptrend in Bitcoin as a potential dampening factor for this signal.
In practical terms, Astronomer assigns a 76 percent probability to a market uptick, deeming a shallow pullback as the less likely scenario.
Columbus (@columbus0x) emphasizes the importance of market microstructure to validate these predictions. He anticipates price movements that could breach key liquidation zones, which align with Fibonacci retracement levels that could confirm bullish trends.
Additionally, Bitcoin’s technical indicators suggest a consolidation phase as it rests between last week’s high and low leading up to the FOMC meeting. The daily MACD’s bearish crossover indicates decelerating momentum, with potential alignments towards the shallow-pullback scenario discussed by Astronomer and Columbus.
Ultimately, tomorrow’s FOMC decision seems binary at first glance; however, the crux lies within Powell’s forward-guidance language and its ramifications on terminal-rate pricing. Should he advocate an accommodating tone while acknowledging softer economic data, the market may begin to factor in a June rate cut, consequently bolstering the bullish narrative.
Conversely, a hint at renewed inflation vigilance would empower bears, likely propelling prices below $92,000. Given the thin liquidity conditions and the clustering of options gamma around the psychologically significant $100,000 strike, traders must remain nimble and responsive as a narrative clash unfolds in the market landscape.
At present, Bitcoin is trading at $94,097.
