The Bitcoin market is enduring potential turbulence as the Federal Open Market Committee prepares to close its May 6-7 meeting.
The federal fund rate is widely expected to remain unchanged at 4.33% (target 4.25%-4.50%), but attention will be focused on the tone and nuance of Esteri’s Chair Jerome Powell’s subsequent press conference at 2pm.
The background is complicated. The US economy signed in the first quarter of 2025, showing a comeback from the second half of 2024.
Consumer spending has slowed considerably, but inflation remains rising, with the Core PCE Price Index rising to 3.5% per year.
At the same time, recently enacted trade tariffs are poised to put upward pressure on prices, whilst attenuating growth prospects.
| indicator | Q4 2024 (actual) | Q1 2025 (actual) | Trends and the impact of the Fed |
|---|---|---|---|
| Actual GDP growth (annual) | 2.4% | -0.3% | Contractions indicate economic weakening. It puts the FRB into pressure towards a more adjustable posture. |
| PCE Inflation (annual) | 2.4% | 3.6% | Acceleration far exceeds the target. Pressure to maintain a restrictive stance. |
| Core PCE Inflation (annual) | 2.6% | 3.5% | Core inflation is also accelerating, reinforcing concerns about underlying price pressures. |
| Unemployment rate | ~3.7-3.9% (East.) | 4.2% | It’s a small increase, but still relatively low. It gives room for feeding, but monitors for deterioration. |
| Growth in consumer spending | 4.0% | 1.8% | A sudden slowdown indicates a weakening of demand. Concerns about future growth. |
This combination has increased the illusion of stagflation, putting the Fed in a position of unstable policy flexibility and limited policy flexibility.
The role and impact of Bitcoin in macroeconomics and its effects
As in the surge in institutional adoption through funds traded on exchanges, Bitcoin, which is more closely tied to the macroeconomic narrative, has responded sharply to the Fed’s policy decisions in recent quarters.
Rate holds can encourage selling, but cuts often fuel meetings.
For example, the quarterpoint cut in December 2024 coincided with a Bitcoin climb and a climb to $108,000. In contrast, the rate hold in March 2025 was followed by choppy price action, reflecting Powell’s increased sensitivity to guidance.
The market is widely anticipating another hold, with futures prices showing this probability of over 97%.
Instead, the focus shifts to the forwarding guidance.
As Powell attacks Dub’s tone, highlighting the risk of shortcomings to growth, downplaying tariff-driven inflation, and suggesting rate cuts later this year, Bitcoin can see an updated upward momentum.
Conversely, Hawkish’s signal suggests persistent inflation concerns or skepticism about mitigation.
The fluidity conditions surrounding an event can exacerbate volatility. As seen in previous FOMC cycles, options market positioning and thinner liquidity could amplify daytime movements. Traders are closely watching potential “sell news” responses if Powell’s statement fails to meet the incredible expectations already priced.
Bitcoin will move after FOMC meeting
Beyond short-term movements, the evolving correlation with Bitcoin’s macroeconomic indicators highlights its mature market structure. The approval and adoption of the Spot ETF brought in institutional investors to adjust their portfolios based on interest rate trajectories and broader financial terms.
This shift is more closely aligned with Bitcoin with its traditional asset response to monetary policy, but its unique characteristics remain a critical factor.
The analyst’s predictions reflect the scope of possible scenarios.
| FOMC Results Scenario | Probably the direction of the price of bitcoin | Major Bitcoin Price Levels (Support/Resistance) | Support factors/Analyst comments |
|---|---|---|---|
| Hold + dovish guidance | above | Support: ~$94K, ~$92K Resistance: ~$98K, $100K, ~108K | Lowering the expectations of actual interest rates, risk-on sentiment, Powell is positive in the code. You can retest the highs or push them to $10. |
| Hold + Hawkish Guidance | under | Support: ~$92K-94K (initial), ~$89K, high price 80K Resistance: ~$97K | Fear of high-rise rates, risk-off emotions. It could be $91.5K-$92K or a hefty $80K. |
| Hold + Neutral/Absurd | Cutter / Rangebound / Minor dip | Support: ~$92K-94K Resistance: ~$97K-98K | Lack of fresh catalysts, get profit from price news. Continuous integration. Volatility is still possible. |
According to Bernstein, if Dovish’s policy and ETF inflows are in a positive alignment, Bitcoin could reach $200,000 in 2025. Others such as Matt Mena from 21Shares expect $150,000 per year end under a bullish macro environment.
But the bearish voices persist. Bloomberg’s Mike McGrone transformed the possibility of abrupt corrections to $10,000 as the macroeconomic turmoil deepened.
When Bitcoin’s dominance rises above 65% in Altcoins’ risk aversion, the dual role of digital assets, both macro-sensitivity and singular assets, becomes a more sharp focus.
Facility flows increasingly determine price action, and FOMC meetings are now serving as important catalysts.
So today’s decision and Powell’s commentary are poised to resonate well beyond traditional finance, which could form the trajectory of Bitcoin until mid-2025.
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