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Bitcoin Breaks $105K: Will Powell’s Fed Signal Push It to a New ATH?
Key Insights
Bitcoin has reclaimed the $105,000 level on the back of the speculation around the US FED possibly pivoting towards easing monetary policy.
Sometime between Monday and Tuesday, financial markets, including crypto, reacted quickly to a speech by Fed Chair Jerome Powell.
Even though Powell was in tone, he hinted that the FED is more open to interest rate cuts if the current economics continue.
The speech, combined with cooling inflation and solid employment numbers, has created the perfect storm for Bitcoin bulls who are betting on a softer dollar and better financial conditions.
Here’s how things could play out for Bitcoin over the short and long terms.
Powell’s Speech and the Market Buzz
Jerome Powell spoke at the Federal Reserve’s International Finance (IF) Division’s 75th anniversary conference.
The event was focused on the importance of worldwide modeling and economic interconnectivity.
And while the speech did not include any direct promises to lower interest rates, there were certain remarks in between that caught the attention of market players.
Powell pointed out how important IF research is helping the Federal Open Market Committee (FOMC) assess “risks and uncertainty.”
He specifically mentioned the relevance of IF Division models in today’s climate, which is a statement many interpreted as support for rate cuts.
Even though this was not a formal policy announcement, the speech was enough to start strong speculation across risk markets.
Crypto investors, in particular, saw Powell’s speech as an early sign that the Fed may shift toward rate cuts if inflation continues its downward trend.
Cooling Inflation Adds Fuel to the Rally
As support for this outlook, the latest Consumer Price Index (CPI) numbers showed annual inflation falling to 2.3%.
This is very close to the Fed’s 2% target.
Meanwhile, the labor market remains strong, with unemployment hovering at around 4.2%.
This combination of disinflation and job stability gives the Fed more room to make favorable decisions.
Crypto analyst Kyle Chassé weighed in on the situation via X, and said: “Rate cuts on the table later this year. That’s rocket fuel for Bitcoin.”
Market sentiment appears to agree as well, with more and more traders betting that the FED could introduce rate cuts before the end of the year.
Bitcoin Holds Steady Above $105K
Bitcoin surged to $105,568 after Powell’s remarks, according to data from CoinMarketCap.
Even though the 24-hour price gain was modest at just 0.62%, $105,000 was a psychological price level that has now been flipped into support.
This upward momentum shows that investors are pricing in a more favorable Fed policy and are rotating capital into risk assets.
This is especially true as many investors see Bitcoin and other cryptocurrencies as a hedge against both monetary instability and long-term inflation:
Especially now when the U.S. dollar is showing signs of weakening.
While Powell did not confirm any incoming rate cuts, his comments about the importance of scenario modeling and uncertainty management have encouraged speculation.
The FED may indeed pivot towards a more responsive, data-driven approach in upcoming meetings.
Technical Indicators Show Further Upside
More than mere macroeconomic drivers, technical analysts are also predicting further gains.
According to insights from Trading expert TradingShot, Bitcoin recently bounced off its 4-hour 200-period moving average, which it has held since mid-April.
The formation of an “Arc pattern” on the four-hour chart, which has historically come before major breakouts, is also a bullish sign.
Adding to the case, the RSI on the daily chart also recently dipped into oversold territory for the first time since early April.
This indicates that buyers could soon step in to drive prices higher.
According to TradingShot, if Bitcoin breaks above the four-hour 50-period moving average, a 16% rally could push the asset toward $120,000 in the short term.
Trader El_crypto_prof also noted $102,000 as a major buy zone, alongside $97,000 as an important support level for a bullish continuation.
Despite recent price consolidation, Bitcoin remains well above both its 50-day and 200-day simple moving averages, and the $120,000 zone may not be far off.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.