Bitcoin pauses after strong rally

6 Mayıs 2025

Bitcoin Pauses After Strong Rally as Investors Turn Cautious Ahead of Fed Policy Decision

Written by Linh Tran, Market Analyst at XS.com

Bitcoin (BTC) has delivered a strong four-week rally, surging from the early-April low near $74,500 to a temporary peak around $98,000 — the highest level in nearly a month. However, the momentum has started to slow, with BTC retreating slightly to the $94,000 area in the most recent session as profit-taking emerged near the key resistance level.

The latest rally has largely been driven by a resurgence in risk appetite, fueled by renewed institutional inflows into U.S. spot Bitcoin ETFs and growing optimism over a potential thaw in U.S.–China trade tensions. Recent statements from both sides signaling a willingness to restart working-level negotiations helped ease concerns of an imminent tariff escalation, supporting demand for risk assets like Bitcoin.

Still, the $98,000 level has proven to be a significant technical barrier. The failure to decisively break above this zone triggered short-term profit-taking, reflecting continued market sensitivity to psychological resistance levels, especially after a multi-week advance.

Meanwhile, geopolitical uncertainty remains a key overhang. Escalating tensions between Russia and Ukraine, including fresh attacks and stalled peace talks, have reignited investor caution. In this environment, defensive strategies tend to prevail, leading to reduced appetite for high-volatility assets like Bitcoin in the near term.

Looking ahead, this week’s focus shifts to the upcoming Federal Reserve policy meeting (FOMC), scheduled for Thursday. The latest U.S. Non-Farm Payrolls report showed a still-resilient labor market, although wage inflation is beginning to ease. This may encourage the Fed to maintain a cautious but not overly hawkish stance. Should the central bank offer clearer signals of a potential rate-cut cycle later this year, Bitcoin could regain momentum on expectations of looser financial conditions. On the other hand, if Fed Chair Jerome Powell strikes a more guarded tone, further consolidation or downside in BTC may follow.

 

Zaid Barem / ymm