Bitcoin Could Drop To $90K As BTC Traders Await Fed Meeting
The Fed is likely to leave interest rates unchanged on Wednesday, but traders will be watching closely for comments on the economic outlook and possible signals about future rate cuts.
Author: Shaurya Malwa | Edited by: Parikshit Mishra Updated: May 5, 2025, 1:39 pm Published: May 5, 2025, 1:03 pm
Key points:
- Bitcoin fell below $95,000 amid macroeconomic uncertainty and Federal Reserve meeting expectations.
- Experts are warning of further weakness ahead, with key support levels at $92,500 and $89,000.
- Despite the drop, Bitcoin ETFs saw net inflows of $1.81 billion last week, indicating continued investor interest.
Bitcoin (BTC) fell below $95,000 on Monday, with traders eyeing a possible drop to $90,000 or lower amid growing macroeconomic uncertainty and the market's focus shifting to this week's Federal Reserve meeting.
The pullback comes after a strong two-week rally that saw BTC briefly rise above $98,000, attracting retail investor interest and institutional flows. However, some analysts point to a combination of technical and macroeconomic risks that could put further pressure on prices.
“We are back in a significant resistance zone that served as support from December to February,” FxPro’s Alex Kuptsikevich wrote in an email to CoinDesk.
“The next downside targets are $92,500 and $89,000. A clean break below $90,000 would be both technically and psychologically devastating, resulting in a decline below the 200-day moving average.”
Traders are closely monitoring the developments in tariff talks between the US and China, which could have a significant impact on Bitcoin prices, and are looking ahead to the Federal Reserve's policy meeting later this week.
The Fed is expected to leave interest rates unchanged on Wednesday, but traders will be watching for comments on the economic outlook and clarity on future rate cuts.
“A combination of solid data and hopes for an easing of trade tensions helped markets recover from the post-Liberation Day sell-off,” Singapore-based QCP Capital said in a morning note.
“But with the earnings season over, attention now turns to the Fed and US-China trade developments. While PCE data shows inflation pressures are easing, higher import tariffs could reignite price volatility. The key question remains whether the Fed will resist political pressure from Trump to cut rates or consider changing its stance,” QCP added.
Despite the short-term pullback, spot Bitcoin ETFs continue to attract inflows. Net inflows last week totaled $1.81 billion, according to SoSoValue.
However, on-chain indicators suggest that caution may be warranted. Glassnode noted that the total unrealized gains for long-term Bitcoin holders have reached nearly 350%, a level that historically precedes periods of intense profit-taking.
Historically, LTH is starting to be distributed more aggressively around 350% of unrealized profits, which corresponds to a $BTC price of ~$99.9k. As
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