Fed Split on Rate Cuts Sparks Bitcoin Volatility Amid Geopolitical Risks
The Federal Reserve kept its benchmark rate at 4.25% but revealed a growing split over future cuts. Governor Christopher Waller advocates for a July rate cut to support the labor market, while Richmond Fed President Thomas Barkin sees no data justification and warns that tariffs could stoke inflation. This discord follows hints that geopolitical events—such as a potential US-Iran conflict, EU-Iran negotiations, and a breakdown of the US-China tariff truce—could prompt emergency easing. The dollar index has dropped from 104 to near three-year lows around 99, boosting Bitcoin’s appeal as an inflation hedge. Technical firm DaanCrypto warns BTC may rebound if it reclaims key liquidity zones or risk sliding toward $100,000 monthly lows. A surprise Fed cut could further weaken the dollar and fuel a Bitcoin breakout above $120,000.
Neutral
Mixed signals from Fed leaders and geopolitical uncertainties create a balanced outlook for Bitcoin. In the short term, volatility may spike as traders react to Fed speeches and data releases, testing key liquidity zones around $100,000. A surprise rate cut could weaken the dollar further, fueling bullish momentum toward $120,000. Long term, sustained Fed easing amid inflation risks and ongoing geopolitical tensions could underpin Bitcoin’s appeal as an inflation hedge, but failure to reclaim critical levels would maintain downside risk.