Over the past six days, the price of Bitcoin (BTC) has been hovering between $107,000 and $110,000, failing to achieve any substantial rise. However, the upcoming release of The Federal Reserve (FED) meeting minutes (Wednesday, July 9) and the FOMC meeting at the end of the month (July 30) may change this situation. The key question is: How will a rate cut by the FED this month impact the price of Bitcoin if inflation continues to decline?
What is the likelihood of The Federal Reserve (FED) lowering interest rates this month?
According to the CME FedWatch Tool, up to 95% of investors expect the Federal Reserve to keep interest rates unchanged at the meeting on July 30. This expectation is mainly supported by the U.S. employment report for June released last week, which showed that 147,000 jobs were added in that month.
The market generally believes that the price of Bitcoin may have already priced in the possibility of interest rates remaining unchanged this month. However, recent debates about the potential significant decline in U.S. inflation are heating up, which may change investor expectations and even prompt The Federal Reserve (FED) to adjust its policies.
Inflation data becomes a key variable: Can BTC benefit?
The Truflation U.S. inflation index has triggered speculation about interest rate cuts, as it plummeted from 2.27% to 1.70% in less than two weeks, coinciding with the eve of the official CPI data release on July 15. If the official CPI data released next week also confirms a significant decline in inflation, it will be a major positive for BTC prices because it will greatly enhance market expectations for future interest rate cuts by The Federal Reserve (FED).
Meanwhile, The Federal Reserve (FED) will release the minutes from the May meeting on July 9. The market is closely monitoring this report for insights into the true attitudes of FED officials towards the inflation outlook. If the minutes indicate that officials' concerns about inflation have significantly eased, the Bitcoin price may take this opportunity to initiate a rebound.
Interest rate cut timing expectation: September more likely?
It is important to clarify that even if the CPI data decreases next week and the wording of the meeting minutes is gentle, the possibility of a rate cut this month is almost zero. The current mainstream market expectation (61%) points to the Federal Reserve potentially making its first rate cut in September, by 25 basis points.
If an unexpected rate cut occurs: BTC may hit a historic high
If the Federal Reserve unexpectedly cuts interest rates this month, the price of Bitcoin is very likely to experience a strong pump, even breaking the all-time high (ATH), as the current market pricing for this scenario is very insufficient.
From a technical perspective, the Bullish Pennant Pattern formed on the four-hour chart suggests that if the BTC price can effectively break through the resistance level of $108,547, it may trigger a rise of approximately 4.95%, targeting $113,913, which would be a new historical high.
The technical indicators supporting this bullish forecast include:
Relative Strength Index (RSI) is at 51, indicating that the current Bitcoin pump momentum is dominant, and there is further upside potential.
Awesome Oscillator (AO) The histogram is still in the negative zone but has turned green, indicating that bearish strength is weakening and bulls are gradually taking control.
Key points: Inflation data and policy expectations dominate BTC trend
Short-term catalysts: The U.S. CPI inflation data next week (July 15) and the upcoming Federal Reserve (FED) meeting minutes (July 9) are key events affecting this month's Bitcoin price fluctuations.
Impact of Interest Rate Cut Expectations:Inflation data falling below expectations will significantly strengthen interest rate cut expectations, becoming a core potential driver for BTC price pump.
Unexpected Rate Cut Effect: If the Federal Reserve unexpectedly cuts interest rates this month, it may trigger strong buying pressure, pushing BTC to test and break through the historical resistance level of $113,913.
Technical Support: Currently, the Bitcoin technical analysis shows a bullish structure, and a breakthrough of the key resistance level will confirm the upward trend.
Uncertainty Risk: Without supportive inflation data or signals of a policy shift, uncertainty in the crypto market may continue to suppress BTC prices and keep them fluctuating within a range.
Summary:Bitcoin price trends are highly dependent on the upcoming inflation data and signals from The Federal Reserve (FED). If inflation cools significantly as expected, even if there is no interest rate cut this month, strong expectations for interest rate cuts may push BTC to challenge historical highs before the end of the month. Conversely, if the data falls short of expectations or the signals are unclear, uncertainty in the crypto market will continue to dominate the market, limiting the upward space for BTC.
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
Bitcoin Price Prediction: Can The Federal Reserve (FED) Cut Rates Propel BTC to Break Historical Highs?
Over the past six days, the price of Bitcoin (BTC) has been hovering between $107,000 and $110,000, failing to achieve any substantial rise. However, the upcoming release of The Federal Reserve (FED) meeting minutes (Wednesday, July 9) and the FOMC meeting at the end of the month (July 30) may change this situation. The key question is: How will a rate cut by the FED this month impact the price of Bitcoin if inflation continues to decline?
What is the likelihood of The Federal Reserve (FED) lowering interest rates this month?
According to the CME FedWatch Tool, up to 95% of investors expect the Federal Reserve to keep interest rates unchanged at the meeting on July 30. This expectation is mainly supported by the U.S. employment report for June released last week, which showed that 147,000 jobs were added in that month.
The market generally believes that the price of Bitcoin may have already priced in the possibility of interest rates remaining unchanged this month. However, recent debates about the potential significant decline in U.S. inflation are heating up, which may change investor expectations and even prompt The Federal Reserve (FED) to adjust its policies.
Inflation data becomes a key variable: Can BTC benefit?
The Truflation U.S. inflation index has triggered speculation about interest rate cuts, as it plummeted from 2.27% to 1.70% in less than two weeks, coinciding with the eve of the official CPI data release on July 15. If the official CPI data released next week also confirms a significant decline in inflation, it will be a major positive for BTC prices because it will greatly enhance market expectations for future interest rate cuts by The Federal Reserve (FED).
Meanwhile, The Federal Reserve (FED) will release the minutes from the May meeting on July 9. The market is closely monitoring this report for insights into the true attitudes of FED officials towards the inflation outlook. If the minutes indicate that officials' concerns about inflation have significantly eased, the Bitcoin price may take this opportunity to initiate a rebound.
Interest rate cut timing expectation: September more likely?
It is important to clarify that even if the CPI data decreases next week and the wording of the meeting minutes is gentle, the possibility of a rate cut this month is almost zero. The current mainstream market expectation (61%) points to the Federal Reserve potentially making its first rate cut in September, by 25 basis points.
If an unexpected rate cut occurs: BTC may hit a historic high
If the Federal Reserve unexpectedly cuts interest rates this month, the price of Bitcoin is very likely to experience a strong pump, even breaking the all-time high (ATH), as the current market pricing for this scenario is very insufficient.
From a technical perspective, the Bullish Pennant Pattern formed on the four-hour chart suggests that if the BTC price can effectively break through the resistance level of $108,547, it may trigger a rise of approximately 4.95%, targeting $113,913, which would be a new historical high.
The technical indicators supporting this bullish forecast include:
Key points: Inflation data and policy expectations dominate BTC trend
Summary: Bitcoin price trends are highly dependent on the upcoming inflation data and signals from The Federal Reserve (FED). If inflation cools significantly as expected, even if there is no interest rate cut this month, strong expectations for interest rate cuts may push BTC to challenge historical highs before the end of the month. Conversely, if the data falls short of expectations or the signals are unclear, uncertainty in the crypto market will continue to dominate the market, limiting the upward space for BTC.