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See our full XRP forecast here.
While XRP struggled, Bitcoin’s reaction diverged.
Bitcoin Reacts to US Data and Trade News
XRP’s drop failed to influence bitcoin (BTC) demand on Monday, May 5. Stronger-than-expected US economic data dragged BTC to a session low of $93,639.
The ISM Services PMI rose from 50.8 in March to 51.6 in April, beating a consensus of 50.6. As services are a key inflation driver, the sharp rise in the Prices Index to 65.1 (up 4.2 points) may temper hopes for a Fed rate cut in H1 2025. A less dovish Fed rate path may aim to tame tariff-driven inflationary pressures. However, it could raise borrowing costs, impacting risk assets.
The Nasdaq Composite Index ended the Monday session down 0.74%, while gold soared 2.86%, closing at $3,332. Trade developments added to the risk-off sentiment after President Trump announced 100% tariffs on movies produced outside the US.
MicroStrategy Doubles Down on BTC at Sub-$100,000
Despite a potentially less dovish Fed stance, BTC rebounded from early losses. MicroStrategy (MSTR) Chairman Michael Saylor disclosed a 1,895 BTC purchase, stating:
“MSTR has acquired 1,895 BTC for ~$180.3 million at ~$95,167 per bitcoin and has achieved BTC Yield of 14.0% YTD 2025. As of 5/4/2025, we hodl 555,450 $BTC acquired for ~$38.08 billion at ~$68,550 per bitcoin.”
This follows a 15,355 BTC acquisition on April 28. Recent US BTC-spot ETF inflows and MSTR’s double-down tilted the supply-demand balance firmly in BTC’s favor, supporting a return to the $94,000 mark. US BTC-spot ETF issuers reported net inflows of $1,805 million in the week ending May 2 and $2,942 million of net inflows in April.
BTC Price Outlook: Policy and Legislation in Focus
BTC gained 0.41% on Monday, May 5, partially reversing Sunday’s 1.67% slide to close at $94,774.
Near-term price action will depend on trade developments, Fed policy signals, Bitcoin Act news, and ETF flow trends.
Potential price scenarios include:
- Bearish Scenario: Escalation in the US-China trade war, hawkish Fed guidance, US recession concerns, resistance to the Bitcoin Act, and renewed ETF outflows. Bearish sentiment could send BTC below $90,000.
- Bullish Scenario: Easing US-China trade tensions, a dovish Fed stance, strong US data, pro-crypto legislation, and sustained ETF inflows. Bullish sentiment could drive BTC above $100,000.
Legislative developments may play a pivotal role. The Bitcoin Act’s progress on Capitol Hill could be vital for BTC’s supply-demand outlook. Senator Cynthia Lummis reintroduced the Bitcoin Act, proposing the US acquire one million BTC over five years with a 20-year holding period. If passed, the bill could significantly influence BTC’s long-term supply-demand trajectory.
On May 5, President Trump reinforced the US government’s pro-crypto stance, stating:
“I want crypto. Crypto is important because if we don’t do it, China will.”
His comments followed Arizona’s Democratic Governor Katie Hobbs’ veto of a bill that would have allowed the state to invest up to 10% of public funds in digital assets such as BTC.
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