Bitcoin was trading at $61,000 on July 3 after the U.S. inflation outlook worsened.
Fed Powell Takes Hardline Position on Rate Cuts
According to data from Cointelegraph Markets Pro and TradingView, BTC price strength is slowly recovering after dropping 2% at the daily close.
This further extended the existing downtrend, creating a low of $60,561 on Bitstamp and erasing the weekend’s uptrend.
The mood appeared to sour after Federal Reserve Chairman Jerome Powell delivered a speech on the economy and monetary policy at an event in Portugal.
He explained that the Federal Reserve needs to be more confident that the situation is right for it to cut rates, a key move that crypto and risk-asset bulls are watching closely.
“We just want to understand whether the levels we’re seeing are a true readout of what’s actually happening in underlying inflation,” he said, according to Reuters and other sources.
The market is slightly downgrading the odds of a rate cut at the September Federal Open Market Committee (FOMC) meeting, still at around 65% as of this writing, according to CME Group’s FedWatch tool.
“It is clear that the Fed will continue its ‘meeting-by-meeting’ approach,” the trading information site The Kobeissi Letter wrote in part in response to X.
“The market is expecting two rate cuts this year, but the Fed’s latest guidance suggests one cut is coming. The next few months are critical.”
Bitcoin Hashrate Drop Could Trigger ‘Healthy Delayed Correction’
Bitcoin market participants watched in frustration as BTC/USD fell back into the lower reaches of its familiar range.
Related: Was $60K a Bear Trap? 5 Things to Know About Bitcoin This Week
Popular trader Skew has pointed out that manipulative liquidity is moving through the exchanges through order “spoofing.” In the recent case, overhead resistance was created, which was added and removed multiple times.
He added that spot demand on Binance, the world’s largest exchange, was “below” $60,000 that day.
Others have pointed out that Bitcoin filled the recent “gap” in CME futures that emerged thanks to the weekend rally.
For Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriol Investments, the recent BTC price action has been a cause for concern.
He argued that the market has yet to accept the ongoing capitulation among miners, a phenomenon Cointelegraph recently reported on.
He warned his X followers that “the price has not yet reflected the on-chain destruction.”
“It doesn’t have to be that way, time heals all wounds, but Bitcoin is not patient. Either we get lucky and the price consolidates between $60k and $70k for a couple of months, or we vomit and have a healthy delayed correction.”
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