On Wednesday, Bitcoin (BTC) surged beyond $97,000 before returning to the $96,000 mark. The short test occurred as markets processed a flurry of Chinese pronouncements aimed at increasing liquidity and mounting conjecture that the US Federal Reserve (Fed) could move closer to a return to quantitative easing (QE).
Traders are frantically reevaluating the global macro picture due to the timing of the swings, which came just hours before a pivotal FOMC (Federal Open Market Committee) meeting.
China unleashes $138 billion in liquidity as trade talks reignite risk-on sentiment
A news conference was held at the State Council Information Office. Interest rate reductions were announced by People’s Bank of China (PBOC) Governor Pan Gongsheng, who was present.
In addition to lowering the policy interest rate by 10 basis points, the PBOC said that it will reduce the reserve requirement ratio by 0.5 percentage points, freeing around 1 trillion yuan (~ $138 billion) in long-term liquidity.
“Pan Gongsheng, governor of the People’s Bank of China, announced at a press conference that the reserve requirement ratio would be cut by 0.5 percentage points, providing the market with about 1 trillion yuan of long-term liquidity, and lowering the policy interest rate by 0.1 percentage points,” local media reported.
The seven-day reverse repo rate was lowered by the PBOC from 1.5% to 1.4%. The loan prime rate will drop by an additional 10 basis points as a result.
A 500-billion-yuan re-lending instrument for senior care and consumption was among the other assistance measures it announced. It also lowered reserve requirements for auto finance companies and mortgage rates.
China’s stimulus plan was not launched at random. US Treasury Secretary Scott Bessent had just hours earlier announced that he will meet with Chinese Vice Premier He Lifeng on May 10 and 11 in Switzerland. Since President Trump increased tariffs on Chinese imports to 145%, these would be the first formal trade negotiations.
Thanks to @POTUS, the world has been coming to the US, and China has been the missing piece—we will meet on Saturday and Sunday to discuss our shared interests.
The current tariffs and trade barriers are unsustainable, but we don’t want to decouple.
What we want is fair trade. pic.twitter.com/MYc4XvqME8
— Treasury Secretary Scott Bessent (@SecScottBessent) May 6, 2025
The markets responded quickly. The Kobeissi Letter claims that this revelation caused S&P 500 futures to jump more than 1%. Bitcoin did the same, rising above $97,000 before falling.
Bitcoin (BTC) was trading at $96,497 at the time of writing, up a little 2.16% over the previous day. The market remains apprehensive as traders prepare for the FOMC later today, which is why the market has retracted to the $96,000 level.
Fed Bond buying raises quantitative easing flags
Meanwhile, there are concerns about the Fed’s balance sheet action this week. The Fed bought $14.8 billion in 10-year Treasury notes on May 6 after buying $20 billion in 3-year notes on May 5, for a two-day total of $34.8 billion.
🚨BREAKING: FED “NOT QE 💵🖨️
The Fed bought $14.8 billion worth of 10 year bonds today.
This is on top of the $20 Billion it bought yesterday.
That’s $34.8 Billion in 2 days.
“NOT QE” https://t.co/in9KDHZ4ld pic.twitter.com/lTDQ5PZjGY
— The Coastal Journal (@1CoastalJournal) May 6, 2025
These purchases imply that the Fed is subtly injecting cash in a quantitative easing maneuver without making an official statement.
A dovish move is extremely optimistic for cryptocurrency, according to Arthur Hayes, the former CEO of BitMEX. In a previous piece, Hayes made the case that if the Fed resumes QE, Bitcoin would be worth $250,000 by the end of 2025. The Fed’s liquidity actions, in his opinion, mark the start of that process.
The likelihood of QE returning and its ramifications were also examined. Any new round of QE might devalue fiat, lower real rates, and possibly encourage large inflows into cryptocurrency assets.
But not everyone agrees that QE is required. Macro specialists contend in a rebuttal paper that given the current state of the market, quantitative easing is not required. They argue that there are now no indications of systemic crisis in the banking sector.
As a result of investor apprehension, gold rose to almost all-time highs of $3,437.60 an ounce, up 28.84% so far this year.
A fear of trade as investors navigate the current economic volatility is suggested by the gold price increase.
As Fed Chair Jerome Powell gets ready to speak to markets later today, investors are waiting to see if there will be more uncertainty or clarity. Although Bitcoin’s quick surge above $97,000 suggests hope, the cryptocurrency market as a whole could be range-bound until the Fed plays its cards.
If Powell suggests a little turn, Bitcoin may soon find support above the $97,000 mark. Traders could see more volatility otherwise.
World Liberty Financial opens voting for USD1 airdrop, unlocks stable yield
The Trump family-backed decentralized finance (DeFi) initiative World Liberty Financial (WLFI) has formally started a vote to authorize the airdrop of its USD1 stablecoin to qualified holders of WLFI tokens.
In order to provide a steady income for the USD1 stablecoin, World Liberty Financial has further extended its collaboration with Lista DAO.
WLFI pushes USD1 adoption through airdrop and stable yield
Following its proposal for the airdrop in early April, World Liberty Financial is currently moving forward with the distribution of USD 1 to holders of WLFI. These procedures consist of an airdrop test and a snapshot vote.
“This advisory proposal recommends World Liberty Financial test its onchain airdrop feature by distributing a small amount of USD1 to all current WLFI token holders. This will allow World Liberty Financial to validate the technical functionality of its airdrop system in a live environment while thanking early supporters of the project,” the team stated.
The dates of the governance vote are May 7–14. As of this writing, 99.97% of respondents favor “YES,” or agreeing to move on with the USD1 airdrop test. This implies that the airdrop will probably be started by the project this month or the following.
In March 2025, the stablecoin USD1 was introduced. It is backed by USD deposits, short-term US government bonds, and other assets that are comparable to cash. With support from the Trump family, USD1 is becoming a new participant as the global stablecoin market value rises beyond $242 billion.
Data also indicates that USD1 grew quickly over a brief period of time. Its market value was $128 million on April 28. It jumped to more than $2 billion the next day.
In March 2025, the stablecoin USD1 was introduced. It is backed by USD deposits, short-term US government bonds, and other assets that are comparable to cash. With support from the Trump family, USD1 is becoming a new participant as the global stablecoin market value rises beyond $242 billion.
Data also indicates that USD1 grew quickly over a brief period of time. Its market value was $128 million on April 28. It jumped to more than $2 billion the next day.
Following the voting, WLFI announced that USD1 will be included into the Lista DAO ecosystem on BNB Chain. A message on the project’s X account states that the USD1/ListaDAO liquidity pool is currently operational. This enables users to take part in DeFi activities including borrowing, lending, and generating a steady income.
🦅 USD1 has landed in the @lista_dao ecosystem!
The USD1/ListaDAO pool is now live, unlocking stable yield + real DeFi utility.
The momentum behind USD1 is real — and we’re just getting started.
Let’s fly. 🦅 https://t.co/is7SP1dtbN— WLFI (@worldlibertyfi) May 7, 2025
In the cryptocurrency market, stable yield is quickly gaining popularity, particularly as investors look for constant yields from stablecoins that don’t experience the price fluctuation of other tokens.
WLFI is presently facing criticism from legal authorities despite its progress. Legislators have put WLFI under a lot of pressure because of financial relationships with foreign investors that have sparked worries about conflicts of interest and threats to national security.
Cardano price at risk amid Ethereum’s Pectra upgrade – here’s why
Due to the impending Ethereum Pectra update, the price of Cardano is at risk of declining. Will a downward trend be fueled by historical rhyme?
Due to past trends showing that network upgrades on ETH have not always been favorable for ADA, the price of Cardano (ADA) is at danger of dropping during the impending Ethereum Pectra upgrade. Cardano is beating the odds with an intraday gain of 2% at the time of writing, while Pectra is coming online today, May 7. But will history repeat again, forcing ADA to fall and perhaps lose important support at $0.66? Let’s investigate.
Why Cardano price faces pressure from Ethereum’s Pectra
Given that Cardano and Ethereum are two of the oldest tier one networks in the cryptocurrency space, their struggle for supremacy has been going on for years. Because of this conflict, ADA frequently experiences bearish pressure anytime the Ethereum network is improved to increase its scalability and utilization.
For example, the London upgrade that included a mechanism to burn a portion of transaction fees to make ETH more deflationary was the catalyst for the biggest decline in the price of Cardano in 2021. Following the Ethereum Merge in 2022, which changed the network’s proof-of-work algorithm to proof-of-stake, ADA likewise saw a drop.
Early last year, when Cardano had a 65% drop following Dencun, the most recent ETH upgrade took place. The price of ADA might experience a sharp collapse if history repeats itself and the impending Pectra upgrade contributes to a drop for this ETH competitor.
Looming long liquidations put ADA at risk
An even deeper slump will be fueled by the cluster of long liquidations at $0.66 if Cardano crashes and loses crucial support as history dictates. If the price drops to this level, the liquidation map indicates that over $5.4 million in long ADA positions will be liquidated, which would increase selling pressure.
The enormous leverage on this cryptocurrency will generate Cardano volatility when millions of positions are closed, according to analyst Kamil, who responded to the issue by saying that “ADA traders are playing with fire.” Another expert pointed out that a drop in whale activity and transactions will have a negative impact on the Cardano price projection in addition to the huge long leverage. He stated,
“Whales are stepping back and transaction has been down up to 83%. Still watching out for its momentum to get stable otherwise we will embrace weakening confidence from big players.”
According to these market circumstances, Cardano’s price is probably going to see negative pressure in the upcoming weeks, which is consistent with past trends when the cryptocurrency fell after the Pectra update went online.
A surge in network activity, however, could disprove this pessimistic assessment of the cryptocurrency, given that DeFiLlama data shows that the stablecoin market capitalization on the blockchain has hit a record high. This suggests higher network utilization, which might enhance the usefulness of ADA.
Cardano technical analysis
The ADA technical prognosis is mixed, according to the four-hour Cardano chart. A continuation of the downward trend shown in the descending parallel channel may result from the RSI’s rejection of its attempt to cross above 50, which indicates that the recent spike in purchasing pressure is abating.
The MACD has created a buy signal after crossing above the signal line, and the price of Cardano is hinting to a breakout from this channel. Only if it closes strongly above the resistance trendline and the RSI reaches a higher high above 50 will there be a significant breakout from the bearish pattern.
In conclusion, if history is any indication, Cardano could be about to see a downturn if the impending Pectra update on Ethereum triggers a drop in price. If ADA can close decisively from a declining trendline, it would validate that the trend is set to change from a negative to a prolonged uptrend, disproving this bearish thesis.
