Bitcoin Almost Reaches $105,000 Mark Amidst a Change in Rhetoric from the U.S. Federal Reserve

Bitcoin nearly touched the $105,000 mark amid a substantial change in rhetoric from the U.S. Federal Reserve, which is followed closely by cryptocurrency traders and analysts. For the first time since 2021, the Fed's tone has become more neutral and soft, which could create favorable conditions for further cryptocurrency growth.

Trader and analyst Skew has pointed out that Bitcoin almost reached the $105,000 level thanks to news of improved trade relations between the U.S. and China.

"Markets want to see the realization of Trump's comments on the way forward on trade between the U.S. and China. Transportation data is already showing insiders are on board, so container volume briefly rose again," explained Skew.

According to analyst Rekt Capital, the progress of the current Bitcoin bull market is estimated at 85.5%. "The progress will accelerate with a parabolic movement," the expert emphasizes.

1-month chart of BTC/USD. Source: Rekt CapitalChange in the Fed's rhetoric as a key factor

A graph provided by analytical resource Ecoinometrics showcases a significant change in the U.S. Federal Reserve's communications.

The Fed Communications Index at the May 7 press conference recorded a neutral-to-blue tone for the first time since 2021. Fed Chairman Jerome Powell highlighted several risks to the U.S. economy, signaling a shift in focus from fighting inflation to preventing an economic slowdown.

The Fed is shifting to neutral-soft rhetoric for the first time since 2021, creating a favorable backdrop for cryptocurrencies. Source: Ecoinometrics

Ecoinometrics emphasizes, "Powell is no longer strongly emphasizing inflation; he is talking about downside risks." This fundamental change creates a macroeconomic backdrop that favors risk assets.

Technical Picture and Traders' Sentiment

Despite the positive dynamics, trader Roman recommends investors with long positions from the $80,000 level consider taking profits. "There is a lot of over-optimism in the market, and we are approaching a significant resistance level. Profit-taking has never hurt anyone," he advises.

Keith Alan, co-founder of Material Indicators, highlights the importance of a test of support after crossing $100,000. "Holding above $100,000 without declines below that mark would be an extremely positive signal. A decline below opens the door for a test of support at $98,000," explained Alan.

Historical Context of Corrections

Trader Daan Crypto Trades mentions that corrections are a natural part of a bull market.

"It can look scary when you're in it, but usually the situation looks worse than it is. And if history has taught us anything, recoveries always happen pretty quickly, especially during a major bull trend."

Bitcoin's major corrections in the current cycle. Source: Daan Crypto Trades

Bitcoin's major corrections in the current cycle are clearly visible on the chart:

The longest correction occurred after the period of hype surrounding the launch of the Bitcoin ETF and lasted 117 days. The deepest decline was the correction after the presidential inauguration and the introduction of tariffs, when Bitcoin lost 32.08% of its value in 77 days.

Daan's analysis confirms his main thesis: corrections are always accompanied by certain narratives, but usually the situation looks worse than it really is, and recoveries are quite fast, especially during a significant bullish trend.