Bitcoin Price Prediction – BTC Likely to Drop to $90K as Fed Week Subdues Risk-On Sentiment

Highlights:

• Bitcoin corrects after failing at $97825.99 resistance
• Failure could see Bitcoin drop to around $93k in the short term
• The upcoming rate decision by the Fed drives short-term bearish sentiment

Bitcoin has dipped to $94,616 today, down by 1.06% in the past 24 hours. This decline follows the cryptocurrency’s failure to breach a key resistance zone on May 4, which triggered short-term profit-taking and paused momentum. Market participants are waiting on the sidelines, anticipating a minor price decline before re-entering the market, particularly as broader market risk sentiment weakens ahead due to multiple external factors. 

Arizona’s Governor Vetoes State Bitcoin Reserve Bill

One factor that has seen Bitcoin fail at short-term support is politics. Arizona’s Governor Katie Hobbs vetoed legislation that would have permitted the state to allocate up to 10% of public funds into digital assets such as BTC. In her letter to Senate President Warren Petersen, Hobbs cited the strength of Arizona’s retirement system, asserting that cryptocurrencies, “untested investments,” in her opinion, serve no practical benefit. This action effectively dismantles what would have been the inaugural state-level Bitcoin Reserve in the U.S.

🚫 Arizona Vetoes Bitcoin Reserve Bill

Governor Katie Hobbs vetoed SB 1025, which proposed allocating up to 10% of public funds to digital assets like Bitcoin, citing concerns over volatility and untested investments.#Arizona #Bitcoin #CryptoPolicy #SB1025 pic.twitter.com/NKxqkoHocy

— Coinspeaker (@coinspeaker) May 5, 2025

Republican State Senator Wendy Rogers heavily criticized the decision. Rogers claimed that Bitcoin is extremely popular with younger voters and independents, so Hobbs missed an opportunity to modernize the state’s financial approach.

Upcoming Federal Reserve Rates Decision Triggers Bitcoin Risk-Off Sentiment

Today’s BTC price correction reflects the Fed’s May 7 policy decision. The Fed has maintained the benchmark rate between 4.25% and 4.50% since December 2024, and the general expectation for this month is no change. Without clearer signals on future cuts or hikes, the absence of rate guidance forces investors to take a risk-off approach, reducing head exposure to volatile assets such as cryptocurrencies.

Can crypto prices pump soon?

The Fed’s next interest rate decision is coming on May 7, 2025 at 6:00 PM UTC / 11:30 PM IST

→ If they cut rates, a major rally could begin
→ But most likely, there won’t be a rate cut this month
→ If not now, June is the next month for a rate… pic.twitter.com/SkQ4TjWin3

— CRGlobal (@CRGlobalNews) May 4, 2025

BTC’s Long-Term Optimism Remains Strong

Although bearish in the short term, Bitcoin’s long-term trajectory is promising. Its adoption by established institutions is increasing, indicating a shift where cryptocurrencies are now viewed as more than just speculative investments but integral parts of diversified investment portfolios.

Traditional financial institution Charles Schwab will soon unveil spot crypto trading services for retail customers through E*Trade. Schwab’s plans showcase conventional financial institutions’ growing interest in cryptocurrencies and could drive long-term demand for Bitcoin.

Charles Schwab plans to launch spot trading for Bitcoin and Ethereum within a year.

The company is waiting for clearer crypto rules and sees growing interest from clients' website traffic to crypto pages jumped 400%.

Schwab already offers crypto exposure through ETFs and…

— Wadi The Crypto Hunter (@WadiCryptoHunt) May 4, 2025

Wall Street Firms Intensify BTC Adoption

Access to trading screens is not the only focus of the institutional push. BlackRock recently revealed that a share class of its $150 billion money market fund will be registered on a blockchain to enhance transparency and streamline processes. This emphasizes the growing perception of blockchain: it is increasingly viewed as a technology that can potentially change traditional finance, not only threaten it. These events mark a key shift: crypto is moving from a niche technology to becoming part of structured financial systems.

JUST IN: BlackRock files for Digital share class of their $150 billion money market fund—shares to utilise blockchain to mirror ownership. pic.twitter.com/plIh6rmaq6

— Whale Insider (@WhaleInsider) April 29, 2025

MicroStrategy Wants to Buy More Bitcoin

Corporate backing also remains resoundingly solid. Strategy is preparing to purchase $1 billion of Bitcoin. Saylor hinted at the purchase via social media by posting his signature “Saylor Tracker” chart and remarking, “Too much blue, not enough orange.” In this context, it is safe to assume the reference is towards increasing Bitcoin holdings. This aligns with MicroStrategy and Saylor’s long-term treasury strategy, which has already positioned the company as one of the largest institutional holders of Bitcoin.

BREAKING: SAYLOR IS BUYING MORE #BITCOIN. LET’S GO 🚀 pic.twitter.com/6oNEQtjNhO

— The Bitcoin Historian (@pete_rizzo_) May 4, 2025

Technical Analysis – BTC Price Fails at Key Resistance Level

Bitcoin is in the red today after failing at the $97,825.99 resistance. If bears remain in control, Bitcoin could drop to the $93,902.67 support. 

A rally through this support could see Bitcoin drop below $93,000. On the other hand, if bulls regain control and push Bitcoin through the $97,825.99 resistance, a rally to $100k could follow.

Recap

A blend of technical and macro factors has caused BTC to decline by 1.06% today. The sentiment is subdued by the upcoming Fed decision on rates and the Arizona governor’s move to veto a Bitcoin Reserve bill. If it drops below $93k, Bitcoin could drop to $90k in the short term.