- Federal Reserve’s rate decision impacting cryptocurrency market dynamics.
- Bitcoin saw a price increase to over $97,000.
- Institutional caution reflected in ETF outflows despite rising BTC prices.
Bitcoin’s price surged above $97,000 on May 7, 2025, as the cryptocurrency market speculates on the Federal Reserve’s rate decision, expected to influence overall market sentiment.
The anticipation surrounding the Federal Reserve’s upcoming rate decision is crucial, as market participants speculate on its influence on cryptomarket volatility and investor sentiment.
The Federal Reserve, led by Chair Jerome Powell, is set to announce its latest policy rate decision, expected to maintain rates at 4.25%–4.50%, amidst rising inflation and unemployment claims. Bitcoin surged to over $97,000, while Ethereum gained, hitting $1,827, showcasing the market’s responsiveness to Federal Reserve forecasts.
The jump in Bitcoin’s price correlates with the futures premium reflected in Deribit Futures prices. However, negative net flows of Bitcoin ETFs suggest institutional caution persists, with investors weighing risks. The crypto derivatives market remains buoyant, as retail investors remain optimistic.
Recent asset movements have highlighted the divergence between retail and institutional investor sentiments, with futures markets displaying enthusiasm, while ETF outflows and decreased basis rates signify a more cautious approach from institutional entities.
Market watchers are anticipating Jerome Powell’s commentary post-FOMC meeting as critical for near-term price direction,” reports suggest.
Historically, Federal Reserve announcements have contributed to crypto volatility, often resulting in price swings in cryptocurrencies such as Bitcoin and Ethereum. Expectations of a rate hold might prompt similar reactions, with traders closely monitoring official commentary for future market directions.
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