TL;DR
- Bitcoin reclaimed $118K despite technical warnings from the Relative Unrealized Profit metric signaling potential sell pressure, with focus on July CPI data and Fed policy uncertainty as key catalysts.
- Political tensions at the Fed intensified after Trump-appointed officials dissented on rate holds, boosting crypto’s appeal as a hedge against institutional fragility and potential inflation spikes.
- Altcoins showed resilience amid macro uncertainty, while bond yield spreads widened, reflecting market bets on persistent inflation that could reignite crypto’s safe-haven narrative.
Bitcoin has regained the $118,000 mark during a widespread recovery in the crypto market, indicating a return of positive momentum following several days of unstable consolidation. The recovery follows a temporary dip to $115,700 triggered by Federal Reserve Chair Jerome Powell’s hawkish comments, which dashed hopes for near-term rate cuts.
Altcoins joined the upswing as markets digested political tensions surrounding the Fed’s independence, with analysts suggesting crypto could strengthen as a long-term hedge against institutional uncertainty.
Bitcoin’s Fragile Rebound
Bitcoin stabilized at $118,419 after trading rangebound between $117,261 and $120,000 earlier this week. Even with the recovery, analysts caution about hidden sell-side pressure. The Relative Unrealized Profit (RUP) metric recently breached the +2σ band, suggesting potential downward pressure. This technical tension reflects investor caution ahead of July’s CPI data and amid concerns that tariffs could fuel inflation in the coming months.
Fed Independence Fears Boost Crypto’s Appeal
Wednesday’s FOMC meeting saw the Fed hold rates at 4.25%, sparking dissent from two Trump-appointed officials (Michelle Bowman and Christopher Waller) who advocated for cuts.
Powell’s emphasis on inflation control over political pressure triggered brief liquidations, but analysts like Orbit Markets’ Jimmy Yang see long-term opportunity: “Concerns about the Fed’s independence strengthen crypto’s case as a hedge.” Greg Magadini of Amberdata added that premature rate cuts could ignite “significant bitcoin rallies” while eroding bond values.
Altcoins Weather Macro Uncertainty
Major cryptocurrencies reversed overnight losses despite Powell’s stance. Ethereum rose more than 1% to $3,800, BNB gained 1.45% to $795, and XRP held steady at $3.00. Solana slightly decreased to $177, whereas Dogecoin ($0.21) and Cardano ($0.76) experienced small increases. This resilience underscores capital rotation into altcoins as bond markets price in long-term inflation, with 10-30 year yield spreads widening from 15bps to 55bps since Trump’s election.
CPI Data Looms as Make-or-Break Catalyst
Markets now await July’s CPI release, which could dictate crypto’s near-term trajectory. Yang anticipates initial “sell-offs alongside risk assets” if tariffs spike inflation, but notes “crypto might rebound as a hedge narrative re-emerges.” Magadini cautions that sustained inflation would validate bond market forecasts, weakening arguments for rapid rate cuts.
