Authored by Mary Liu, Bitpush News
The minutes from the Federal Open Market Committee (FOMC) meeting on June 11th and 12th revealed consensus among policy makers on the issue of price stability. However, there was no agreement among Federal Reserve officials on how many months of good inflation data would be needed to start cutting interest rates. Some officials advocated for patience before taking action, while others indicated that a rate hike was still under discussion.
According to Bitpush data, Bitcoin lost support at $62,000 in the early hours of Wednesday, dropping to a low of $59,515 before bullish momentum pushed it back above $60,000. Nevertheless, bearish pressure continued to exert downward force, with the BTC trading price at $59,691 at the time of writing, showing a more than 3.5% decrease in the last 24 hours.
As Bitcoin fell below $60,000, the downward trend extended to altcoins, with all but five of the top 200 tokens by market capitalization experiencing declines on Wednesday. Blast (BLAST) suffered the most, dropping by 20.3%, followed by Ethereum Name Service (ENS) and dogwifhat (WIF) with declines of 16.2% and 15.8% respectively.
BinaryX (BNX) led the gains, rising by 9%, while Worldcoin (WLD) increased by 3.5% and aelf (ELF) rose by 1.6%.
The total market capitalization of cryptocurrencies currently stands at $2.21 trillion, with Bitcoin holding a market share of 53.4%.
US stocks continued to rise, with the S&P 500 index and the Nasdaq 500 index increasing by 0.51% and 0.88% respectively by the close of the day, marking consecutive days of reaching historical highs. The Dow Jones index decreased by 0.06%.
“Need ‘more evidence,'” imply Fed officials not in a hurry to cut interest rates
Regarding the outlook for monetary policy, the latest meeting minutes indicate that participants noted slower progress in lowering inflation this year compared to expectations from December. They emphasized that lowering the target range for the federal funds rate would be inappropriate unless more information emerged to give them greater confidence that inflation is steadily moving towards the 2% target.
The minutes also stated, “Some participants noted that if inflation were to remain high or rise further, the target range for the federal funds rate may need to be increased,” while “some participants indicated that monetary policy should be prepared at all times for unexpected economic weakness.”
Nick Timiraos of the “Fed megaphone” wrote that due to rising inflation, Fed officials lack sufficient confidence to cut interest rates, with some policymakers urging caution at last month’s meeting in light of signs that labor market weakness may be developing faster than expected, along with recent public statements from Fed officials, the minutes suggest that a rate cut at the later meeting this month is unlikely.
In a report, institutional analyst Cameron Crise pointed out that the Fed’s June meeting minutes indicate the committee is moving towards an accommodative policy stance but has not yet “overcome the difficulties” to make a decision.
“The normal FUD cycle”
As Bitcoin retests the lower end of its volatility range since late February, some analysts warn that with momentum seemingly shifting towards the bearish side, Bitcoin could drop to the $40,000 range. However, most analysts believe these concerns are exaggerated and simply exacerbate the normal FUD cycle.
Market analyst HornHairs on X platform stated, “If BTC stays significantly below $56,000 for an extended period and then sharply rebounds above $60,000, then I would feel safe to go long again.”
Market analyst Rekt Capital said that the breakout on Monday was delayed because it failed to retest the downtrend from June as a new support. He posted a chart and stated, “Nevertheless, this is still a trendline worth watching for potential shifts in the future.”
Benjamin Cowen mentioned some macro factors, stating on his podcast that based on historical correlations between Bitcoin and the 10-year bond yield (US10Y), Bitcoin could trend lower.
Cowen said, “Typically, one reason you might see Bitcoin drop is because the long end of the curve starts to rise…But if you look at the 10-year yield, you’ll notice that when the 10-year yield rises dramatically, it coincides with Bitcoin dropping from July 2023 to October, and if the 10-year bond yield starts to rise sharply again in October, that might coincide with a bit of seasonal weakness in Bitcoin.”
Market analyst Moustache noted that he believes Bitcoin has bottomed out, with BTC currently only retesting recent downtrend lines before continuing its upward trajectory.
Blockchain data platform Santiment emphasized that despite retail traders selling tokens in response to FUD-induced weakness, whales are more bullish than ever, with over 16.17 million BTC accumulated in more than ten whale wallets, reaching a historical high. Santiment stated on X platform, “We are seeing increased buying power from Tether and USD Coin holders, which could truly open the floodgates for the crypto bull market.”
