The macroeconomic week starts quickly with Fed Chair Powell participating in a discussion at the Washington D.C. Economic Club. Amid last week’s mixed inflation data, markets will closely follow Powell’s statements for clues on how U.S. fiscal policy might change moving forward. So, how could these developments affect Bitcoin prices? Let’s explore together.
FOMC Meeting and Market Expectations
The Federal Open Market Committee’s (FOMC) next meeting at the end of the month is not currently planned to include an interest rate cut; this is a key event tracked by risky asset investors. Instead, the critical moment for policy to decisively shift to a more relaxed stance remains the September FOMC meeting.
Trade source The Kobeissi Letter, in a section of its X summary, referred to upcoming earnings reports from major firms, stating all eyes are on the Fed and the start of earnings season. The latest data from CME Group’s FedWatch Tool shows a 94.3% chance of a rate cut in September as of July 15. This month’s probability, on the other hand, is only 4.7%. Charlie Bilello, chief market strategist at asset management firm Creative Planning, shared the following statements on the matter:
“The market is currently pricing in 2-3 Fed rate cuts before the end of the year and 4 more rate cuts in 2025.”
What’s Happening in the Bitcoin Ecosystem?
The change in price behavior is already being felt in the fundamentals of the Bitcoin network. After three consecutive downward adjustments, mining difficulty will finally start to recover on its own.
Although this depends on maintaining price strength, current predictions of a 4% increase on July 18 offer hope to those concerned about miner health. According to raw data from MiningPoolStats, the hashrate is already challenging all-time highs, supporting a bullish outlook for the future.
Looking at hashrate data comparing 30-day and 60-day moving hash rate changes, it is suggested that the capitulation phase among miners could soon end. The last such phase that came to the fore occurred in August 2023; this period signaled that the Bitcoin price would fall below $30,000 in the long term.
