Bitcoin rebounds strongly as FOMC Meeting approaches! Will it recover the $100,000 level soon?

TradingKey - Bitcoin surged nearly 3% today. Can it keep rising and surpass $100,000? The upcoming Fed’s interest rate decision is a key catalyst.

Wednesday, 7 May - Bitcoin (BTC) jumped almost 3% to reach $97,732, slightly short of the 2 May high of $98,000. Since 23 April, Bitcoin has formed an ascending triangle pattern, a typical bullish technical setup suggesting probable upside breakout.

Bitcoin price trend chart, source: TradingView.

The Federal Open Market Committee (FOMC) is to meet at 2 PM Wednesday to vote on interest rates. This could potentially drive Bitcoin's breakout. LMAX Group market strategist Joel Kruger says the market is awaiting a pivotal catalyst from the FOMC decision.

Vetle Lunde, head of research at K33, notes that given Bitcoin's recent low volatility, significant price swings may occur after the FOMC meeting. He also mentions that the current negative funding rate for perpetual swaps would present a buying opportunity for investors.

It's important to note that the chance of a rate cut by the Fed is very low. According to CME FedWatch data, the market sees only a 1.7% chance of a 25 bps cut, while the probability of keeping rates unchanged is 98.3%. In this base case scenario, it's unlikely that Bitcoin would rise above $100,000. Even if it broke that level, it would struggle to hold. Although, if the Fed cut rates unexpectedly, Bitcoin could rally further.

Market expectations for Fed interest rate decisions, source: CME.