Fed Decision Looms: Will Bitcoin’s $100K Floor Hold or Collapse?

Markets hold their breath as the Federal Reserve prepares to drop its latest policy bomb. Bitcoin’s precarious perch at $100K hangs in the balance—will institutional traders panic-sell or double down?

Here’s what the smart money isn’t telling you: crypto markets haven’t priced in the Fed’s trademark ’volatility surprise.’ Meanwhile, Wall Street analysts keep peddling the same old ’this time it’s different’ narrative. Spoiler: it never is.

Technical indicators scream overbought, but since when did that stop a crypto rally? One thing’s certain—when the Fed speaks today, the only ’stable’ coins will be the ones frozen in traders’ wallets.

Clock’s ticking: The market wants cuts, not caution

Bitcoin’s sitting on a pretty interesting setup right now. 

Exchange reserves are at multi-year lows, Funding Rates are staying green, derivatives liquidity is creeping back in, while spot exchanges keep seeing coins being pulled off. Beneath the surface, robust bid support is quietly accumulating.

But the real catalyst? Fed Chair Jerome Powell’s upcoming speech, which is expected to set the market’s directional tone, is likely to hinge on rate cuts. And honestly, the data is giving that scenario some serious weight.

Despite the noise around reciprocal tariffs, April’s inflation cooled slightly to 2.3% month-over-month – a subtle 0.1% drop from March. Not huge, but enough to pull the easing trigger.

Source: Trading Economics

Meanwhile, the market’s betting big on a rate cut, with the odds of a MOVE to the 4.25 – 4.50% target zone jumping to 98.7% from 96.2% in just 24 hours. That’s a clear signal traders are in “hold your horses” mode.

Brace for impact: A volatile week lies ahead for Bitcoin

While all the “buzz” around rate cuts is hitting a fever pitch, the real story lies in the hard data. This week’s lineup of key economic releases will put May’s trade war impact under the microscope.

If the numbers confirm a slowdown, the Fed may have little choice but to step in. Until then, traders are bracing for volatility. 

Nowhere is that uncertainty more evident than in Binance’s positioning, where longs and shorts are locked in a dead-even 50-50 split.

But make no mistake, the shorts are circling. A sizable short pool is already forming, with a liquidation trigger set at $103,881. If Bitcoin slides back to that level, $39.4 million in longs would be flushed out.

Source: CoinGlass

As for the odds? Despite the market’s growing conviction around a rate cut, history has a way of defying mainstream expectations. 

Bitcoin’s bid wall NEAR $100k may be holding for now, but it’s anything but stable. If sentiment overextends and the Fed plays it cautious, don’t be surprised if that bid wall turns from support into a trapdoor.

In turn, cracking the $100k floor – fast.