FOMC meeting minutes suggest no rush to cut interest rates, BTC tests $59,500 in the early morning

Original author: Mary Liu, BitpushNews

The minutes from the Federal Reserve's FOMC meeting on June 11-12 show that policymakers are united on the issue of price stability, but there is no consensus among Fed officials on how many months of good inflation data are needed before interest rate cuts can begin. Some officials believe in maintaining patience before taking action, while others indicate that rate hikes are still under discussion.

Bitpush data shows that Bitcoin fell below the support level of $62,000 early Wednesday morning, hitting a low of $59,515, before bullish forces pushed it back above $60,000. However, bears continued to exert downward pressure, and as of the time of writing, BTC was trading at $59,691, down more than 3.5% in 24 hours.

As Bitcoin fell below $60,000, the downward trend in altcoins intensified, with all but five of the top 200 tokens by market capitalization experiencing declines on Wednesday. Blast (BLAST) was hit hardest, dropping 20.3%, followed by Ethereum Name Service (ENS) and dogwifhat (WIF), which fell 16.2% and 15.8%, respectively.

BinaryX (BNX) led the gains, rising 9%, while Worldcoin (WLD) increased by 3.5%, and aelf (ELF) rose by 1.6%.

As of the time of writing, the total market capitalization of cryptocurrencies is $2.21 trillion, with Bitcoin's market share at 53.4%.

U.S. stocks continued to rise, with the S&P 500 and Nasdaq 500 indices closing up 0.51% and 0.88%, respectively, marking a second consecutive day at record highs, while the Dow Jones Industrial Average fell 0.06%.

Need for "more evidence," Fed officials suggest no rush to cut rates

Regarding the outlook for monetary policy, the latest minutes state: participants noted that progress in reducing inflation this year has been slower than expected in December. They emphasized that unless more information emerges that gives them greater confidence that inflation is moving toward the 2% target, it would be inappropriate to lower the target range for the federal funds rate.

The minutes also indicated that "some participants noted that if inflation remains elevated or rises further, the target range for the federal funds rate may need to be adjusted upward," while "some participants stated that monetary policy should be prepared to respond to unexpected economic weakness at any time."

"Fed mouthpiece" Nick Timiraos wrote that due to rising inflation making Fed officials lack sufficient confidence in cutting rates, some decision-makers called for close monitoring of signs of a weakening job market that may occur sooner than expected during last month's meeting. Coupled with recent public statements from Fed officials, the minutes suggest that they are unlikely to cut rates at the upcoming meeting later this month.

Institutional analyst Cameron Crise noted in a report that the Fed's June meeting minutes indicate that the committee is moving toward easing policy but has not yet "overcome the difficulties" in making a decision.

"Normal FUD cycle"

As BTC retests the lower boundary of its volatility range since late February, some analysts warn that Bitcoin could drop to the $40,000 range as momentum seems to be shifting toward bears. However, most analysts believe these concerns are exaggerated and merely exacerbate the normal FUD cycle.

Market analyst HornHairs stated on the X platform: "If BTC stays below $56,000 for an extended period and then rebounds significantly above $60,000, I would feel safe to go long again."

Market analyst Rekt Capital mentioned that Monday's breakout "was delayed due to the failure to retest the June downtrend as new support," and he shared the following chart, stating: "Nevertheless, this is still a trend line worth watching for future trend changes."

Benjamin Cowen pointed out some macro factors in his podcast, stating that based on the historical correlation between Bitcoin and the 10-year bond yield (US 10 Y), Bitcoin may decline.

Cowen said: "Typically, one reason for seeing Bitcoin drop could be that the long-term yield curve starts to rise… but if you look at the 10-year yield, you'll notice that when the 10-year yield really spikes, from July 2023 to October, that's when Bitcoin tends to drop. So if the 10-year Treasury yield starts to spike again in October, it could correspond with some seasonal weakness in Bitcoin."

Market analyst Moustache expressed that he believes Bitcoin has bottomed out, and BTC is merely backtesting the recent downtrend line before continuing to rise.

On-chain data platform Santiment emphasized that despite retail traders selling tokens amid the FUD-induced weakness, whales are more optimistic than ever, with over ten whale wallets now accumulating 16.17 million BTC, a record high. Santiment stated on the X platform: "We are seeing increased purchasing power among Tether and USD Coin holders, which will truly open the floodgates for a crypto bull market."