Key points:
Bitcoin and gold trade in lockstep on low timeframes as macro volatility triggers heighten.
The Federal Reserve interest rate decision and news conference are just hours away.
Market sentiment for rate cuts in 2025 decreases sharply ahead of the FOMC meeting.
Bitcoin (BTC) saw a flash short-term trend change on May 7 as geopolitical triggers gave risk assets fresh volatility.
BTC/USD 1-hour chart. Source: Cointelegraph/TradingView
Bitcoin traders eye Fed for “tone changes”
Data from Cointelegraph Markets Pro and TradingView showed an abrupt turnaround for BTC/USD after the pair dipped under $94,000 to set new May lows.
The previous day’s Wall Street trading session set the stage for a return to strength, even as stocks finished lower.
XAU/USD 4-hour chart. Source: Cointelegraph/TradingView
Bitcoin and gold reached local highs of $97,700 and $3,435, respectively, before consolidating.
News of tensions boiling over between India and Pakistan, along with potential progress on a US-China trade deal, kept markets lively.
This reaction to US-China trade talks being scheduled tells you all you need to know.
A LOT is already priced-in here. pic.twitter.com/jT6pKOdgiQ
— The Kobeissi Letter (@KobeissiLetter) May 7, 2025
Traders had no time to relax, with the Federal Reserve interest rate decision due later on May 7.
While market expectations for the Federal Open Market Committee (FOMC) meeting were practically unanimous, as Cointelegraph reported, Fed Chair Jerome Powell’s subsequent statement and news conference were of more interest.
“The market will be eager to watch for any dovish or hawkish changes in their tone, which has been pretty mixed recently,” popular trader Daan Crypto Trades summarized in an ongoing X analysis alongside data from CME Group’s FedWatch Tool.
Fed target rate probabilities for May 7 FOMC meeting. Source: CME Group
Examining Bitcoin order book activity, Keith Alan, co-founder of trading resource Material Indicators, said that nearby liquidity had been “cleared out” before the event.
“Pleasantly surprised BTC held above the YOU, but won’t be surprised if price round trips the range before the end of the week,” he told X followers, referring to the yearly open level at $93,500 as a potential downside target.
BTC/USDT order book data. Source: Keith Alan/X
”Clearly pessimistic”
Continuing, Darkfost, a contributor to onchain analytics platform CryptoQuant, noted declining odds of rate cuts coming sooner in 2025.
Related: Bitcoin could rally regardless of what the Federal Reserve FOMC decides this week: Here’s why
At the time of writing, the June FOMC meeting had combined rate cut odds of around 30% — noticeably lower than in recent weeks.
“Expectations are clearly pessimistic for now,” he concluded.
“If the Fed does decide to cut rates in this context, it will trigger volatility and might spark fear among investors (depending about how many Bps).”Fed target rate probability comparison for June 18 FOMC meeting. Source: CME Group
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
