Federal Reserve Chairman Jerome Powell hinted at potential flexibility in monetary policy, prompting a weekend rally for Bitcoin 
$91,081, which spiked from $103,000 to $106,000. As the report was being prepared, Bitcoin was trading above the $105,000 mark, bringing altcoins along in this upward trend. Powell’s remarks underscored the critical role global data plays in decision-making, invigorating risk appetite. During the Asian trading session, transaction volumes notably increased, refreshing investor interest.
The Market Cheers Powell’s Statements
At a Federal Reserve event focused on international finance, Powell didn’t directly address interest rates. However, he emphasized inflation’s decline to 2.3% and unemployment stabilizing around 4.2%. Participants inferred from this that the Fed might shift from its “patient tightening” approach to a gradual easing policy. A minor decline in bond yields and a slight weakening of the dollar index further supported this expectation.
Comments from Chicago Fed President Austan Goolsbee, who noted that inflation is decelerating on schedule, alongside Powell’s message, resulted in a forward shift of the anticipated first rate cut from November to September in the futures funding markets. Although CME FedWatch data showed a 95% probability of interest rates remaining unchanged at the June 18 FOMC meeting, the chance of a 25-basis-point easing by the last quarter increased to 55%. Analysts highlighted a cautious optimism, suggesting the Fed might also review its pace of balance sheet reduction.
Potential Rate Cut Breathes New Life into Bitcoin and Altcoins
Following Powell’s comments, Bitcoin gained $3,000 in seconds, reaching $106,700, reversing the weekend’s negative sentiment. Futures contract open positions increased by 8% in 24 hours, with on-chain data indicating that short-term investor costs are concentrated around $96,700. As long as this level is maintained, new record attempts seem likely.
Technically, daily closings above $104,800 confirm the trend’s strength, while analysts highlight the psychological resistance at $110,000. The entry of $620 million into ETFs last week supports buying appetite. If inflation indicators continue to improve before the Fed meeting, surpassing the historical peak around $112,000 will not be surprising. Altcoins may also partake in the rally led by the largest cryptocurrency at this juncture.
