Main Points :
- FOMC Outcome and Market Reaction: Fed holds rates steady; Bitcoin exhibits resilience without major pullback.
- Stagflation Signal as a Catalyst: Rising Fed concerns over stagflation may favor Bitcoin as a scarce digital store of value.
- Technical Breakout and Trend Analysis: 1‑hour chart shows clear uptrend; key resistance at ¥14,000,000 (＄97,454) under test.
- Macro Drivers Beyond Fed: Stable FX, U.S.‑China trade optimism, and muted Trump rhetoric underpin bullish sentiment.
- Risks and Next Triggers: Psychological barriers, short‑term corrections, and unexpected economic data or comments from Powell could alter trajectory.
- Conclusion and Outlook: Sustained bullish momentum likely, but investors should monitor key levels and macro developments closely.
FOMC Outcome and Market Reaction
On May 7–8, 2025, the Federal Open Market Committee (FOMC) opted to maintain the federal funds rate at 4.25%–4.50%, signaling a data‑driven stance and reluctance to tighten further even amid solid labor market readings and modest inflation upticks. In the immediate aftermath, global equities experienced a mild consolidation, while Bitcoin quickly rebounded from a brief dip, reclaiming the $96,000–$97,000 range within hours of the announcement. This resilience underscores Bitcoin’s growing decoupling from traditional risk assets during periods of policy stability.
Despite traders having largely priced in the rate hold—with CME’s FedWatch Tool indicating a 96% probability of no change—market focus shifted to Fed Chair Jerome Powell’s subsequent press conference, where nuances in tone could serve as the next directional catalyst for risk‑on assets such as cryptocurrencies.
Stagflation Signal as a Catalyst
In its post‑meeting policy statement, the Fed flagged concerns over rising inflation and the potential for slowing growth—the hallmark of stagflation. Historically, stagflationary conditions have weighed on equity returns but bolstered hard assets perceived as stores of value. Zach Pandl of Grayscale argues that Bitcoin, by virtue of its capped supply and digital scarcity, may benefit from such a macro backdrop, positioning it as a modern hedge akin to gold.
The acknowledgment of stagflation risk marks a shift in the Fed’s narrative, elevating Bitcoin’s appeal among investors seeking non‑correlated assets. As traditional channels for real asset exposure narrow under restrictive monetary policy, digital alternatives have gained traction in diversified portfolios.
Technical Breakout and Trend Analysis
A technical review of the 1‑hour BTC/JPY chart as of May 8 at 07:33 JST reveals a pronounced uptrend originating from the ¥12,017,560 (＄83,654) low on April 27. The pair surged to an intraday high of ¥13,997,655 (＄97,438) before settling near ¥13,987,000 (＄97,364). Notably, the April 27 low established the foundation for higher lows, while the rally from May 5‑6 demonstrated the market’s conviction, pushing through the former resistance at ¥13,800,000 (＄96,062) and challenging the psychological hurdle at ¥14,000,000 (＄97,454).
Key technical indicators suggest continued bullish momentum:
- Support: The former resistance at ¥13,800,000 (＄96,062) now likely serves as a robust support level.
- Resistance: The ¥14,000,000 (＄97,454) mark represents a critical barrier; a successful breach could propel gains toward ¥15,000,000 (＄104,415).
- Momentum: Short‑term oscillators remain in positive territory, although slight waning suggests a potential consolidation or pullback before the next leg up.
However, prudent traders should watch for retracements to support zones on a pullback, particularly if broader risk sentiment shifts.
Macro Drivers Beyond Fed
Several parallel factors have bolstered Bitcoin’s rally:
- Stable FX Conditions: Yen‑dollar rates have stabilized post‑FOMC, reducing currency‑driven volatility in JPY‑denominated Bitcoin trades.
- U.S.‑China Trade Optimism: Progress in trade discussions has lifted risk appetite, with equities and crypto markets reflecting renewed confidence.
- Muted Political Risks: Absent any abrupt policy pronouncements from President Trump, markets have enjoyed a “calm before the storm” dynamic, allowing crypto to build positive momentum.
These macro drivers create a supportive environment for Bitcoin, complementing technical breakouts and reinforcing the narrative of digital assets as a hedge against policy uncertainty.
Risks and Next Triggers
While the outlook appears constructive, investors should remain vigilant:
- Psychological Resistance: Failure to decisively close above ¥14,000,000 (＄97,454) could trigger profit‑taking and short‑term corrections.
- Data Surprises: Unexpected U.S. employment figures or inflation readings could spur volatility if they deviate from consensus.
- Fed Commentary: Any hawkish undertones from Powell—especially regarding the timing of future rate cuts—may dampen crypto’s rally.
Additionally, geopolitical flashpoints beyond trade—such as Middle East tensions—could intermittently rattle markets, prompting cautionary profit‑booking in risk assets.
Conclusion and Outlook
Bitcoin’s performance following the May 2025 FOMC meeting highlights its maturing role as a differentiated risk asset. The confluence of a clear uptrend on the charts, Fed recognition of stagflation risks, and supportive macro conditions underpin the bullish thesis. A key near‑term milestone is overcoming and sustaining above the ¥14,000,000 (＄97,454) level; doing so would signal another leg higher and potentially accelerate flows into crypto markets.
Nevertheless, market participants should calibrate position sizing in anticipation of intermittent pullbacks and monitor Fed communications closely. In an environment where monetary policy remains on hold but potential stagflation looms, Bitcoin stands poised to strengthen its narrative as a modern safe‑haven asset—provided investors navigate technical hurdles and macro uncertainties with disciplined risk management.
