On May 7, 2025, Bitcoin (BTC) experienced a sudden shift in its short-term trend, driven by geopolitical factors that instigated a wave of volatility across risk asset markets. This unexpected turn saw BTC/USD dip below $94,000, marking its lowest point for May. Despite this downturn, Bitcoin had previously surged to a local high of $97,700, alongside gold, which reached $3,435. The backdrop of rising tensions between India and Pakistan, coupled with potential advancements in U.S.-China trade negotiations, has kept market activity robust.
As traders brace for the Federal Reserve's interest rate decision, expected later today, the market is on high alert for any shifts in tone from the Federal Open Market Committee (FOMC). According to Cointelegraph, the consensus among market expectations for the FOMC meeting was almost unanimous, yet the statement and subsequent press conference by Fed Chair Jerome Powell have raised significant interest. "The market will be eager to observe any tone changes, whether more or less restrictive, which have been rather mixed lately," summarizes trader Daan Crypto Trades in an ongoing analysis on X, accompanied by data from the CME Group's FedWatch Tool.
In the run-up to this pivotal announcement, Keith Alan, co-founder of trading resource Material Indicators, reported that available liquidity had been "zeroed out" before the Fed's event. "I’m pleasantly surprised that BTC has held above the $YOU, but I wouldn’t be shocked if the price swings back within this range before the weekend," he informed his followers, indicating the annual opening level of $93,500 as a potential downside target.
Meanwhile, Darkfost, a contributor to the on-chain analysis platform CryptoQuant, noted a downturn in the probability of a rate cut in 2025. As of the time of writing, the FOMC meeting in June reflected an overall probability of a rate cut sitting at about 30%, a significant drop from recent weeks. "Expectations are clearly pessimistic for now," he concluded. "If the Fed were to cut rates in this context, it could trigger volatility and potentially incite panic among investors, depending on how many basis points are cut."
In parallel, Bitcoin accumulation has been on the rise, with data revealing that long-term holders have added over 250,000 BTC since March, bringing their total to over 14 million BTC. This increase signals a renewed confidence among these investors, as reported by Glassnode. Short-term holders, too, have reversed their previous trend, adding 25,000 BTC last week after months of distribution during Bitcoin's 30% decline.
Bitcoin's current price trajectory shows a 3% increase since the beginning of May, following a substantial 14% gain in April. The inflow into Bitcoin exchange-traded funds (ETFs) has also accelerated over the past two weeks, further supporting market momentum. Glassnode's latest weekly report highlighted that both short-term holders (STHs) and long-term holders (LTHs) have increased their holdings, with LTHs accumulating since early March and STHs beginning to acquire last week.
Glassnode defines long-term holders as those who have held BTC for 155 days or more, while short-term holders have held it for less than that duration. The report indicates that LTHs have increased their holdings by over 250,000 BTC since March, bringing their total supply to over 14 million BTC. "This suggests that a certain degree of confidence has returned, and accumulation pressures are surpassing investors' tendencies to spend and reduce risk," Glassnode noted.
In contrast, STHs have shown signs of renewed accumulation, adding over 25,000 BTC last week. This marks a significant shift from their earlier distribution of over 200,000 BTC that commenced in February 2025, coinciding with the start of Bitcoin's notable drawdown.
As BTC hovers around the $97,000 mark, this large-scale accumulation reflects a resurgence of confidence among various investor cohorts. However, Glassnode identifies a critical resistance level at $99,900, where long-term holders may begin to realize profits once they achieve an unrealized profit margin exceeding +350%. "Therefore, we can anticipate an increase in selling pressure as the market approaches this zone, making it an area that will likely require substantial buying demand to absorb distribution and sustain upward momentum," they cautioned.
In the broader context, James Van Straten, a senior analyst at CoinDesk specializing in Bitcoin and its interactions with the macroeconomic environment, commented on the current market dynamics. Having previously worked as a research analyst at Saidler & Co., a Swiss hedge fund, Van Straten has honed his skills in on-chain analysis, focusing on monitoring flows to assess Bitcoin's role within the larger financial system. Beyond his professional commitments, he serves as an advisor to Coinsilium, a publicly listed company in the UK, offering insights into their Bitcoin treasury strategy.
As the day unfolds, the cryptocurrency community remains on edge, awaiting the Federal Reserve's decision and its implications for Bitcoin's trajectory. With geopolitical tensions and economic uncertainties swirling, the interplay between market sentiment and regulatory developments will likely shape the landscape for Bitcoin and other cryptocurrencies in the coming weeks.
