Following the release of highly anticipated data, Bitcoin‘s value surged to $69,500 before stabilizing at around $69,220. The reduction in inflation appears to have calmed the market, which had been shaken by recent Non-Farm Payroll data. However, market participants are closely watching the Federal Reserve, expecting a major move soon.
How Will the Fed React?
The Federal Reserve is set to announce its interest rate decision and reveal its three-year forecast for interest rates. Fed Chairman Jerome Powell will also provide an assessment of the latest economic data. With favorable indicators like JOLTS, PCE, and the Unemployment Rate, and a positive inflation report, there is a possibility that recent declines in cryptocurrency prices could present buying opportunities if Powell strikes an optimistic tone.
Given the European Central Bank’s recent rate cut, a highly aggressive stance from the Fed is not expected, especially with data indicating economic weakness in the US. The consensus among Fed members points to a potential rate cut of around 75 basis points this year. Signals of the first cut may emerge as early as September, maintaining the market’s excited anticipation.
What Does QCP Capital Predict?
Trading firm QCP Capital, known for its macroeconomic assessments, shared an optimistic outlook just before the inflation data release. They noted the bounce in BTC futures swap points and a rise in yields, suggesting potential gains above 15% with any positive catalyst. Aggressive buying in June 13th maturity bonds and increased funding rates indicate market positioning for an upward surprise.
Key Market Insights
• BTC futures swap points have rebounded from a low of 10%, indicating renewed investor confidence.
• The market shows aggressive buying in June 13th maturity bonds, suggesting expectations of positive outcomes.
• A drop in CPI and neutral FOMC results could catalyze crypto markets to test peak levels again.
• The trading community is eagerly anticipating a breakout following the FOMC meeting.
As the Fed prepares to announce its decisions, the financial world watches closely. Potential interest rate cuts and a favorable economic outlook could continue to drive Bitcoin and other cryptocurrencies higher.