Bitcoin is testing multimonth highs amidst increasing volatility as traders await the Federal Reserve's interest rate decision on May 7, 2025. Market sentiment for potential rate cuts in 2025 has significantly decreased ahead of the Federal Open Market Committee (FOMC) meeting. Bitcoin experienced a shift in trading dynamics after dipping below $94,000, with recent geopolitical tensions and progress in US-China trade talks contributing to market fluctuations. Both Bitcoin and gold saw local highs, with Bitcoin reaching $97,700. Traders are particularly attentive to any signals from Fed Chair Jerome Powell regarding policy changes that could affect market dynamics. Recent data indicates that rate cut odds for the upcoming June meeting are about 30%, reflecting a more pessimistic outlook compared to previous weeks. Analysts suggest that if the Fed does opt to cut rates in this climate, it could lead to increased market volatility and investor apprehension. As the situation unfolds, traders are analyzing order book activity and liquidity levels, preparing for potential market shifts following the FOMC meeting.

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