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Crypto Prune > Market > Bitcoin will pause before Powell’s announcement
Market

Bitcoin will pause before Powell’s announcement

8 months ago 7 Min Read

Bitcoin (BTC) is in a cautious stage Investors are waiting for a decision on the Federal Reserve (Fed) US About interest ratesis scheduled for tomorrow, Wednesday, May 7th, 2025.

At the time of this publication, as seen in the Encryption Price CalculatorUSD 94,000 BTC estimate13% below the historic maximum of 109,300 US$109,300 registered on January 20th, consistent with Donald Trump’s assumptions.

This pause in the Bitcoin Bundle Impulse reflects Uncertainty surrounding the Fed’s next announcement And in particular, President Jerome Powell’s subsequent discourse could provide important clues about the course of monetary policy in the coming months.

The following graph provided by TrainingView shows how Bitcoin has fluctuated since January 1st of this year.

As cryptootics reported yesterday, There is only a 1.8% chance of lowering interest rates tomorrow.. These fees have continued to range from 4.25% to 4.5% since January 2025, after three consecutive cuts in the past few months.

The position of the Federal Reserve led by Powell was clear. The US economy continues to show strength, with solid labor markets and inflation that does not justify immediate action.

This “looks like wait” strategy seeks to assess the impact of the Trump administration’s commercial policy, particularly the impact of import tariffs that have created fears of inflation and recession.

Price decisions are important, but investors are paying more attention to the tone and signs that Powell can offer in his post-advertising speech.

Historically, their comments have produced high volatility in the market, particularly with assets considered “risk” such as Bitcoin, cryptocurrency and behavior. When Powell adopts an optimistic stance about the economy, the market tends to consolidate or climb. Instead, careful or pessimistic tones usually trigger downward corrections.

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In this regard, Powell’s words can predict whether the federal feat of the Fed will be cut in June or a July meeting.

How about altcoins?

BTC slows down the upward course, while cryptocurrencies show a variety of behavior. However, within the top 100 market capitalization, Most digital assets are on weekly returns (the past 7 days).

US President Mimecoin, official Trump (Trump), has achieved the worst ranking position, falling almost 23% over the past seven days.

As you can see in the image below, those who had big falls are Worldcoin (World), Raydium (Ray), Optimism (OP), and Ethena (ENA).

Among the digital assets that maintain aggressive weekly returns, in Antipode, there are 4 (Form), Virtual Protocol (Virtual), Dexe (Dexe), Quant (QNT), and Monero (XMR).

Unlike what happened last week, there are no mimecoins between big increases between digital coins now. This is a sign of that Appetite for risk has diluted, and investors have become more cautious.

Why is what the Fed says so important when Bitcoin is “independent”?

At first glance, it may seem like a contradiction that a currency born with the aim of challenging traditional financial order – is heavily influenced by the US Federal Reserve decision.

After all, Bitcoin was created as an alternative to the centralized banking system and should theoretically function outside of the state’s economic policy.

However, market reality is much more complicated, and there are several weight reasons why Jerome Powell’s words can drive BTC prices (or even more) both BTC prices and the essential events of the Bitcoin ecosystem.

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Bitcoin was devised as a decentralized sovereign currency, Today, it is deeply integrated into global financial markets.. In fact, as you can see in the image below, it is one of the 10 most valuable financial assets in the world.

The existence of Bitcoin ETFs in cash, derivative financial instruments, and US-regulated trading platforms (which are the largest global financial power) shows that a critical portion of capital circulating in BTC comes from institutional investors and funds that respond to traditional incentives.

If interest rates are high, those same funds will find attractive opportunities in treasured debt and savings accounts, reducing their exposure to Bitcoin. On the contrary, forecasting fees will increase your appetite for alternative assets. So, Bitcoin doesn’t require a traditional financial system, but the majority of its liquidity comes from active-participating actors.

This must be added that Bitcoin could be a valuable reserve for some, but in international markets he continues to quote in dollars. Therefore, monetary policy affects relative prices. An increase or decrease in interest rates directly affects the strength of the dollar and, therefore, the value of BTC measured in that currency.

As the dollar is strengthened, as is usually the case with high financial hardening fees and expectations, Bitcoin (as with other assets) tends to lose value in front of it. Not because the intrinsic value changes, but because the market evaluates it based on the purchasing power of the dominant currency.

Finally, you need to understand that Many capitals that enter Bitcoin are seeking to maximize returns rather than try to revolutionize. Most of the current market participants probably aren’t cypherpunks Neither Anarkycapitalists: they are traders, investors, investment funds, and general users who are trying to protect or increase their assets. For them, performance is more important than ideology.

See also  "Even if the Fed cuts interest rates, the problem won't be resolved. If you want to survive, then Bitcoin and..."

So when Powell talks about recession, inflation, or fees, the public will usually react similarly to other financial assets. It is a mistake to think that everyone who invests in Bitcoin shares the same “anti-system” vision. Many people just consider it a good opportunity.

Perhaps as time passes and as the Fíat system continues to deteriorate, more investors are understanding the true value of Bitcoin and why it is so important. Meanwhile, as trader Willie Wu says, each fall is an opportunity to buy BTC at a low price.

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