Bitcoin continues to trade sideways near the $105,000 mark, as the U.S. Federal Reserve held interest rates steady and signaled no imminent rate cut. Despite rising stagflation concerns, the central bank maintained its cautious “wait-and-see” stance—fueling market indecision across traditional and digital assets.
Fed Holds Rates Amid Slower Growth and Sticky Inflation
The Federal Open Market Committee (FOMC) on Wednesday kept its benchmark rate unchanged, in line with analysts’ forecasts and CME FedWatch data. Inflation pressures have eased, but so has U.S. economic growth—prompting concerns over stagflation, where inflation stays high while growth slows.
Fed Chair Jerome Powell acknowledged signs of disinflation but cited strong job data and resilient consumer spending, offering little reason to cut rates before September.
“The Fed reiterated its wait-and-see approach, pushing expectations for a first rate cut to no earlier than September,” noted BRN’s lead analyst Valentin Fournier.
Crypto Market Reacts With Consolidation
Like equities, major cryptocurrencies remained flat post-FOMC:
- Bitcoin (BTC) hovered around $105,000
- Ethereum (ETH) and XRP saw similarly muted movement
- Crypto indices like GMUSA and GMETHEX traded with minor gains
This consolidation, according to analysts, could extend over the summer, aligning with historically low seasonal volumes and a rising put-to-call premium in Bitcoin options.
Why This Backdrop Still Favors Bitcoin
Despite the muted reaction, some analysts argue that macroeconomic uncertainty still supports the long-term bullish case for Bitcoin.
“Stagflationary pressure and economic strain increase Bitcoin’s appeal as a hedge against monetary policy missteps,” said David Hernandez, investment strategist at 21Shares.
Moreover, international rate cuts could redirect capital flows into crypto:
- Swiss National Bank cut rates to zero
- European Central Bank has cut borrowing costs eight times since June 2024
“Bitcoin’s decentralized, borderless nature allows it to absorb global capital, even if the Fed stays on hold domestically,” Hernandez added.
Conclusion: September Rate Cut Hopes Keep BTC on Radar
With futures markets now pricing in a 62% probability of a rate cut in September, Bitcoin remains at the center of macro-driven narratives. However, short-term gains may remain limited by summer trading slowdowns, portfolio rebalancing, and ongoing deleveraging across crypto markets.
As the macro environment evolves, Bitcoin’s role as a non-sovereign, digital hedge continues to gain relevance—especially in times of rising global monetary uncertainty.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.