On May 7, 2025, the Federal Open Market Committee (FOMC) will wrap up its two-day meeting, making a key decision that could have an impact on both the stock and cryptocurrency markets. The focus will be on whether Jerome Powell and the FOMC choose to adjust interest rates.
With President Trump vocal about his stance, there’s a 97% chance, according to the CME FedWatch Tool, that the FOMC will keep rates unchanged at 4.50%. This would mark the third consecutive meeting without any rate adjustments, following the previous cut in December 2024 from 5.5%. As the FOMC press conference approaches, Bitcoin has shown strong performance, reaching a high of $97,600 before seeing a slight pullback today.
Santiment: Four Bitcoin Scenarios Based on Fed’s Decision
According to Santiment, there are four possible outcomes for Bitcoin’s price based on the Federal Reserve’s decision on interest rates:
Scenario 1: Rate Cut Could Push Bitcoin Higher
If the Federal Reserve cuts interest rates, Bitcoin could go up in price. When rates are lower, people usually look for higher-risk investments, like cryptocurrencies, to get better returns. This could bring more money into Bitcoin, causing its price to rise. If this happens, Bitcoin could see a big jump, possibly even hitting $100,000.
Source: TradingView
If Bitcoin can close above $98,000, it could quickly rise toward $102,000 and possibly reach a new all-time high after that.
Scenario 2: No Change in Rates – Bitcoin Stays Stable
If the Federal Reserve keeps the interest rates the same, Bitcoin might not move much.
And without any big changes, the market could stay steady for a while and Bitcoin’s price could stay in its current range of $93,399 and $97,600.
Scenario 3: Rate Hike – Bitcoin Drops
If the Federal Reserve raises interest rates, Bitcoin might go down in price. Higher rates make traditional investments like savings accounts and bonds more attractive, so people might pull money out of Bitcoin and other risky investments.
This could cause Bitcoin’s price to drop and the first support sits near $93,800, with stronger levels at $92,000 and $88,000.
Scenario 4: Rate Cut, But the Market Doesn’t React Well
Even if the Fed cuts interest rates, the market might not respond the way people expect. Sometimes, a rate cut can signal that the economy is in trouble, and people might start worrying about inflation.
If this happens, Bitcoin might not go up like usual. Instead, it could struggle to make gains and even drop in the short term.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
