Bitcoin FOMC Showdown Eyes $98K as Market Jitters Rise

Key Points

• Bitcoin FOMC Showdown Eyes $98K as Market Jitters Rise
• Bitcoin consolidates near $94,000 amid FOMC anticipation
•  Traders expect high volatility despite probable rate hold
• Powell’s tone could trigger major BTC price swings
•  Key price levels may signal breakout or breakdown

Bitcoin is holding steady around the $94,000 mark as the crypto market anxiously awaits the Federal Reserve’s (FOMC) decision on interest rates this Wednesday. According to the CME FedWatch Tool, there’s a 95.6% chance the Fed will keep rates unchanged at 4.25% to 4.5%.

Interest rate probabilities. Source: CME FedWatch Tool – Techtoken

While a rate hold seems almost certain, volatility is expected to surge. Traders are on edge, watching Bitcoin’s tight consolidation and bracing for potential fireworks depending on Fed Chair Jerome Powell’s tone and future guidance.

Swissblock analysts have called this moment a “battle of resistance.” Bears are increasing short positions, as shown by negative funding rates and high open interest. ETF inflows are also slowing, and liquidations are rising—clear signs of a cautious, risk-off approach by investors.

2/ The $97K–$98.5K range is key.

🔹Momentum could trigger short liquidations, pushing $BTC up, but beware:
🔹a bear trap might flip into a bull trap if conviction fades.

Weekend is here, volume is low, caution is crucial! pic.twitter.com/mEY2bRZUDv

— Swissblock (@swissblock__) May 2, 2025

“The $97,000–$98,500 range is critical,” Swissblock noted. “If bullish momentum builds, we could see short liquidations driving BTC upward. But there’s also a risk of a bull trap if conviction weakens.”

Historical trends add to the tension. In three of the last five FOMC meetings, Bitcoin reacted bullishly. However, today’s economic climate—including soft GDP numbers, inflation fears, and ongoing US-China trade tensions—makes this meeting especially unpredictable.

Bitcoin Price Analysis. Source: TradingView – Techtoken

Powell’s tone could spark a breakout—or a market flush

Traders are acutely aware that Powell’s words can make or break Bitcoin’s short-term future. December 2023’s hawkish pivot caused a massive sell-off across risk assets. A repeat performance could send Bitcoin tumbling toward recent lows.

“Bull markets don’t die of old age—they’re murdered by the Fed,” warned a veteran trader named Jim. “If Powell’s tone is overly hawkish or dismisses weak GDP data, we might see another sharp market decline.”

This Wednesdays May #FOMC meeting will result in an #InterestRate hold but also June expectations have flipped to a hold.
With @Trump tariffs, its no surprise that #Inflation is becoming a worry but we know Trump is the master of about turns on policy so maybe things improve 🙏 pic.twitter.com/SoTmnR48yF

— Matthew Dixon – Veteran Financial Trader (@mdtrade) May 5, 2025

Not all are bearish. Michaël van de Poppe, a popular crypto analyst, pointed out gold’s recent rally as evidence of investor caution and suggested a possible ETH recovery post-FOMC. Readers following Ethereum’s development should also note the upcoming Ethereum Pectra upgrade, which could influence ETH price action once market volatility settles.

Another analyst, Crypto Seth, noted increased “degen” trading activity, with Bitcoin forming a local bottom near $94,000.

“Degens are building positions expecting a move,” Seth said. “Market makers might briefly push the price down to grab longs before an upward move. Expect choppy action before the FOMC.”.

**EXTREMELY HIGH RISK**#FOMC #SPY $SPY

“Bull Markets don’t die of old age—they’re murdered by the Fed.”

If Powell’s tone echoes December’s bloodbath or ignores negative GDP, markets may repeat the same violent flush.

How MANY Times has the Market Gotten a Rate Cut… pic.twitter.com/1bDxwljmoO

— Jim (@JP_Money_95630) May 3, 2025

Arthur Hayes, BitMEX co-founder, offered a bullish scenario. If the Fed hints at a future return to quantitative easing (QE), Bitcoin could rally explosively. But if Powell doubles down on a hawkish stance, the crypto market may face another sharp correction.

Rally on Gold indicating that we’re still seeing the risk-off mentality going into the FED meeting on Wednesday.

Good signs: Services PMI rolling upwards.#Bitcoin build-up is good, expecting to see $ETH turn upwards after Wednesday.

— Michaël van de Poppe (@CryptoMichNL) May 5, 2025

As of this writing, Bitcoin trades at $94,474, down 0.16% in the last 24 hours, according to BeInCrypto data.

Is the trade war fully priced in?

🔹15 days ago, we called the start of the bottoming process in U.S. indices.
🔹S&P 500 printed a higher low, now closed April just 1% below its monthly open.

Bitcoin erased its yearly losses in April: will equities follow in May? (a thread) 👇… pic.twitter.com/zLRwjne9qA

— Swissblock (@swissblock__) May 2, 2025

Broader crypto market braces for aftershocks

The FOMC decision’s ripple effects are expected to impact not just Bitcoin but also altcoins and DeFi sectors. XRP traders, for example, continue to monitor the XRP price suppression narrative that has weighed on performance despite market rebounds.

Meanwhile, Ethereum’s simplification efforts aim to make the network more accessible, which could attract new liquidity once the macro uncertainty clears.

Bitcoin (BTC) Price Performance. Source: Techtoken

Investors should also keep an eye on institutional movements. Justin Sun’s recent involvement with First Digital Trust highlights growing strategic partnerships between crypto leaders and traditional finance. These collaborations may offer market stability once the Fed’s policy direction becomes clearer.

Additionally, users must remain vigilant against increasing scams. A recent surge in crypto phishing scams shows that hackers often exploit periods of high market anxiety to target traders.

With the FOMC meeting just hours away, the crypto market holds its breath. Powell’s guidance could tip the balance between a bullish breakout and a bearish breakdown.