Key Insights:
- Bitcoin price has pulled back this month as ETF inflows rise.
- Multiple data points show that the Fed will cut rates in September.
- Fed cuts are highly bullish for BTC and other risky assets.
Bitcoin price has lost momentum this month as signs of profit-taking among investors rise, and ETF outflows rise. BTC price was trading at $114,150, down by over 7% from the year-to-date high. So, can it rebound and hit $150,000 as traders bet on Fed interest rate cuts?
Fed Interest Rate Cuts Could Boost Bitcoin Price
BTC price has sold off in the past few days as third-party data shows investors are starting to profit. For example, data compiled by SoSoValue shows that spot Bitcoin ETFs have continued to experience outflows this month.
These ETFs had outflows of $196 million on Tuesday and $333 million on Monday. Altogether, these ETFs have shed over $1.4 billion in outflows in the last our days, bringing the cumulative inflows since inception to $53 billion.
Bitcoin price has also crashed because of the rising concerns about the US economy due to Donald Trump’s tariffs. A report released last week showed that these tariffs are impacting hiring as hiring stalled and the unemployment rate rose.
On the positive side, the deteriorating economy could push the Federal Reserve to cut interest rates in the next meeting in September. For example, the closely-watched Secured Overnight Financing Rate (SOFR) points to interest rate cuts in the remaining three meetings of the year.
The CME FedWatch tool places the odds of interest rate cuts in September at 84%. The same is happening with Polymarket traders who have pushed odds of rate cuts to 75%.
These odds have jumped after two Fed officials, Christopher Waller and Michele Bowman, voted to cut interest rates in the last meeting. The number of rate cut proponents will jump after the replacement of Adriana Kugler is confirmed in the US Senate.
Why Fed Cuts Are Bullish for BTC Price
Federal Reserve interest rate cuts are highly bullish for Bitcoin price because they often lead to a risk-on sentiment among market participants.
Interest rate cuts normally make bonds unattractive, pushing investors to rotate to risky assets like stocks and cryptocurrencies.
History shows that Bitcoin price rises when the Fed cuts rates and falls when the opposite happens. For example, BTC price surged to a record high during the pandemic when the Fed slashed rates and implemented quantitative easing (QE).
Bitcoin price then plunged in 2022 as the surging inflation pushed inflation to the highest level in over 40 years. It rallied in 2024 as the Fed slashed rates twice.
Bitcoin Price Technical Analysis Points to More Gains to $150k
The daily timeframe chart points to a potential Bitcoin price rebound in the next few weeks. This chart shows that the coin initially jumped to a record high of $123,192 in July and then pulled back to the current $114,315.
On the positive side, the coin has retested the important support level at $112,000, the highest swing on May 22nd and the previous all-time high. This means the coin has formed the popular break-and-retest pattern, often leading to more gains.
Bitcoin has other bullish technicals. It is supported by the 50-day and 100-day Exponential Moving Averages (EMA). Also, the coin is above the ascending trendline that links the lowest point in April, June, and July.
Therefore, there is a possibility that Bitcoin will rebound, initially to the all-time high of $123,192, and then to the psychological point at $150,000.
Summary
Bitcoin price has done well this year, and the rally has now taken a breather as investors book profits. The coin still has bullish catalysts, especially when the Federal Reserve starts to cut interest rates later this year.
The most likely scenario is where BTC price jumps and retests the all-time high at $123,192 and then blasts off to $150k. A drop below the 100-day moving average will invalidate the bullish forecast.
The post Can Bitcoin Price Hit $150,000 as Fed Rate Cut Bets Jump? appeared first on The Market Periodical.
