Bitcoin is navigating through unstable times as it anticipates the Federal Reserve's meeting and further developments in trade relations with China.
FOCUS ON FOMC: RATE PAUSE OR POLITICAL PIVOT
The Federal Open Market Committee (FOMC) meeting on June 18 is crucial for both crypto and traditional markets. Despite rising political pressure from President Trump following a preliminary US-China trade deal, Fed Chair Jerome Powell is unlikely to announce a rate cut.
Prediction markets indicate only a 2% chance of a rate cut. Inflation remains high, with May's CPI data showing a monthly rise of 2.4%. Economic indicators remain resilient, though political pressure may influence FOMC decisions.
BITCOIN DANCES ON MACRO TIGHTROPE
Ahead of the FOMC, Bitcoin has traded within a tight range between $102K and $107K, dipping to $104K after a brief rally interrupted by geopolitical shocks. Technical indicators offer mixed signals.
If the FOMC surprises with dovish comments, Bitcoin may retest its recent all-time high of $112K. Conversely, a hawkish stance could push it below $100K.
RARE EARTHS AND THE SHADOW OF CHINA
While markets await Powell's speech, a new macroeconomic challenge emerges with US-China trade tensions. Last week's "handshake deal" saw Beijing agreeing to expedite export licenses for certain rare earths, but military applications were explicitly excluded.
China holds significant leverage in this area, impacting trade negotiations.
This week's FOMC meeting could define Bitcoin's next major move. Political and economic factors are intertwined, and the meeting's outcomes may significantly affect market dynamics.
