From failed rate cut expectations to the risks and opportunities for BTC.
Written by: Bitcoin Hunter
1. Current status of Federal Reserve policies: the deep logic behind inaction.
In the early hours of today, the Federal Reserve announced its latest rate decision, maintaining the benchmark interest rate in the range of 4.25% - 4.50%, which is a highly probable event. Despite repeated pressures from the Trump administration to cut rates to alleviate refinancing pressure on debt (the US needs to refinance $9.2 trillion in debt by 2025), Fed Chairman Powell clearly stated that current inflation risks (core PCE rising to 2.5%) and uncertainties in tariff policy force the Fed to remain cautious.
Key contradiction point:
1. Shadow of economic recession: US GDP contracted by 0.3% quarter-on-quarter in the first quarter, consumer growth slowed to 1.8%, and corporate confidence is low;
2. Sticky inflation: Tariffs have increased commodity costs, and core inflation indicators remain above the 2% target;
Political game: Trump attempts to pressure the Federal Reserve to cut rates through financial markets, but the controversy over the Fed's independence exacerbates market volatility.
Second, Bitcoin's 'double-edged sword': liquidity expectations and risk asset attributes.
The Federal Reserve's policies impact BTC through two main paths:
1. Liquidity expectations: If rate cuts materialize, the release of dollar liquidity will directly benefit BTC (historical data shows BTC is highly positively correlated with US stocks during easing cycles). However, the current expectations for rate cuts have been postponed until the end of the year, dampening market sentiment;
2. Safe-haven and risk switching: BTC's correlation with US stocks remains high (around 0.7), but on-chain data shows that exchange balances continue to decline, supporting long-term supply scarcity and price stability.
Current market reaction:
- Short-term bearish: The Federal Reserve's hawkish stance has caused BTC to drop to the $93,000 level;
- Mid-term support: Institutional holdings (such as Arizona passing a Bitcoin reserve bill) and the supply gap post-halving provide bottom support.
Third, operational strategies: key positions and risk hedging.
1. Operational suggestions refer to the news brief sent this morning.
2. Monitoring macro variables
Federal Reserve dynamics: Pay attention to PCE data and Powell's speech before the June rate decision;
Geopolitical risks: Will Trump's tariff policy trigger a supply chain crisis (if commodity shortages worsen, BTC may strengthen in line with gold);
On-chain signals: Continuous net outflow from exchanges is considered a bullish signal; conversely, be cautious of selling pressure.
Fourth, conclusion: patiently waiting for policy shifts and market resonance.
Currently, BTC is in the stage of 'policy suppression' versus 'fundamental support', and short-term volatility may intensify. It is recommended that investors reduce leverage, focus on spot trading, and pay attention to the accumulation trends of Asian sovereign funds (such as those from the Middle East and Singapore). If the Federal Reserve signals a rate cut in Q3, BTC is expected to begin a new round of major upward waves, targeting $126,000 to $150,000.
