“Trump's interest rate cut shocks the crypto world! Will Bitcoin soar to $110,000?”
1. Interest rate cut = giving the market a 'shot of adrenaline'
Trump's logic is simple: lowering interest rates can reduce borrowing costs, encouraging businesses and the public to spend and invest more, while saving the government some debt interest. If the Federal Reserve really does this, more money will circulate in the market, and some of this hot money may flow into high-risk assets like Bitcoin—after all, when the Federal Reserve flooded the market in 2020, Bitcoin soared from $5,000 to $65,000. Recently, Bitcoin has been fluctuating around $106,000, and an interest rate cut could give it another boost.
2. If the dollar weakens, Bitcoin strengthens
An interest rate cut will weaken the dollar, while Bitcoin is often seen as 'digital gold' to hedge against inflation. Currently, U.S. CPI data is lower than expected, temporarily easing inflation pressure, but Trump's tariff policy may push prices up in the future. If expectations of dollar devaluation strengthen, more people might see Bitcoin as a safe-haven option, especially institutional funds entering the market through ETFs to support prices.
3. The market is already betting on Federal Reserve actions
Although the probability of a rate cut in June is zero, traders are betting that the probability of a rate cut in September is as high as 75%. With Trump's recent outburst, market sentiment will be more sensitive. Bitcoin may test $110,000 in the short term, but if the Federal Reserve does not comply, it could crash back to the support level of $103,000. On-chain data shows that large holders have been quite active lately, which might be a signal of the calm before the storm.
4. Don't forget the risks
Trump and Federal Reserve Chairman Powell have been at odds, and Powell may resist cutting rates to maintain the independence of the central bank. Moreover, an interest rate cut could trigger asset bubbles, and there are opposing voices within the Federal Reserve as well. If inflation data suddenly rebounds, or if Trump's tariffs lead to soaring prices, the Federal Reserve might slam the brakes, and Bitcoin could take a hit.
As the market continues to change, we must closely monitor market signals and seize new entry opportunities. Like + comment, and let's navigate the bull market together and seize this major opportunity!
