Bitcoin traders look to Fed to boost lagging price — here’s what will drive a rally

Bitcoin traders look to Fed to boost lagging price — here’s what will drive a rally
Cooler inflation data will make it easier for Fed Chair Jerome Powell to cut rates, something traders hope will buoy crypto. Credit: Darren Joseph
  • Bitcoin traders are hoping for cooler June inflation data.
  • Falling inflation means the Fed is more likely to cut interest rates.

US inflation data lands today, and crypto traders are watching closely.

That’s because falling inflation makes it easier for the Federal Reserve to follow through on interest rate cuts later this year, something traders hope will buoy crypto.

Analysts expect the June Consumer Price Index to come in at 3.1%, down from 3.3% in May. A reading lower than 3.1% is bullish, and could cause fireworks.

Neil Wilson, chief analyst at, said in a client email that May’s cooler inflation numbers indicate that the series of hot inflation reports earlier this year “are now firmly behind us.”

In a note to clients, Wintermute highlighted recent comments from Fed Chair Jerome Powell, who said inflation data showed “modest progress.”

More positive data, Powell said, would bolster the committee’s confidence in achieving inflation rates below 2%, a prerequisite for cutting rates.

It’s not just falling inflation that could sway the Fed’s hand. A weaker than expected US employment report released Friday signalled the US central bank to cut interest rates in order to avert a recession.

Markets currently price a 4.5% chance of a July rate cut and an almost 75% chance of one in September, Wintermute said.

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After hitting an all-time high of $73,737 in March, Bitcoin has bled much of its yearly gains.

Fears over the German government’s liquidation of more than $900 million worth of seized Bitcoin drove the asset down to $54,092 earlier this week, a 25% drop from its highs.

Bitcoin has traded under $60,000 since July 4.

There are also signs of interest, despite the summer lull.

On Tuesday, BlackRock’s spot Bitcoin ETF saw $121 million in inflows.

Crypto market movers

  • Bitcoin is down 0.6% in the last 24 hours to $58,311.
  • Ethereum is up 1.1% over the same period to about $3,141.

What we’re reading

Tim Craig is a DeFi Correspondent at DL News. Got a tip? Email him at