According to The Kobeissi Letter, Fed Chair Jerome Powell stated that the Federal Reserve does not need to be 'in a hurry' to adjust interest rates, emphasizing a cautious 'wait and see' approach due to ongoing economic uncertainties (source: The Kobeissi Letter on Twitter, May 7, 2025). This signal of stable rates removes immediate pressure from risk assets, supporting current liquidity conditions. For cryptocurrency traders, this stance reduces near-term volatility linked to rate hikes and may sustain bullish sentiment in digital assets as investors seek alternative returns amidst a steady interest rate environment.

According to Milk Road (@MilkRoadDaily), traders are closely watching the upcoming Federal Reserve decision, as it is expected to influence volatility in the cryptocurrency markets. Historically, FOMC announcements have led to sharp price movements in Bitcoin, Ethereum, and other major digital assets, as interest rate policy changes directly affect risk appetite and liquidity conditions (source: Milk Road tweet, May 5, 2025). Traders are advised to review stop-loss placements, monitor trading volumes, and prepare for potential swings in both directions as the decision approaches.

According to Edward Dowd on Twitter, the velocity of M2 money supply is starting to decline after a period of acceleration that began in 2022. Dowd attributes some of this previous acceleration to government policy impacts, particularly increased immigration flows. For crypto traders, a declining M2 velocity may indicate tightening liquidity conditions, which historically correlates with reduced risk appetite and increased volatility across crypto markets. Monitoring these macroeconomic liquidity shifts, as highlighted by Dowd, is crucial for anticipating potential bearish pressures on major cryptocurrencies and adjusting trading strategies accordingly. (Source: Edward Dowd, Twitter, May 2, 2025)