Bitcoin and cryptocurrency markets are preparing for Federal Reserve Chair Jerome Powell’s testimony to Congress, with traders expecting potential interest rate cuts that could trigger massive price gains.
Bitcoin Rebounds Above $100,000
The bitcoin price has climbed back over $100,000 after recovering from a recent drop caused by Israel-Iran conflict fears. President Donald Trump’s prediction of “massive” crypto investment has helped fuel the recovery.
Markets are now focused on Powell’s semi-annual testimony before lawmakers, which could provide clues about future rate cuts.
Trump Pressures Fed for Rate Cuts
Trump posted on Truth Social overnight calling for the Federal Reserve to “activate” and cut rates by “at least two to three points.” He claimed this would save the U.S. more than $800 billion per year.
Trump criticized Powell as “too late” and “very dumb” while urging Congress to pressure the Fed chair during his testimony.
Fed Rate Cut Expectations Rising
The probability of a July rate cut has jumped to 22% from just 10% last week, according to the CME FedWatch tracker. The Fed kept rates on hold last week after pausing its rate reduction cycle due to inflation concerns.
Several Fed officials this week have suggested it may be time to lower rates:
- Fed Vice Chair Michelle Bowman said “it is time to consider adjusting the policy rate”
- Chicago Fed President Austan Goolsbee noted Trump’s tariffs haven’t been “what people feared”
- Fed Governor Christopher Waller urged moving “now, don’t wait” if concerned about labor market risks
Crypto Traders Expect “Trillions” Inflow
Crypto traders and influencers are building expectations around eventual rate cuts. One trader posted “Buckle up” alongside predictions that “trillions” will flow into crypto once the Fed cuts rates.
Lower interest rates typically benefit risk assets like cryptocurrency by making borrowing cheaper and encouraging investment in higher-yielding alternatives to bonds.
Key Events This Week
Investors are watching two major events:
- Powell’s testimony to Congress today
- Friday’s PCE inflation data
Ray Youssef of NoOnes said the “most bullish scenario would be confirmation of a Fed dovish policy pivot,” which could push bitcoin toward retesting its all-time high.
Geopolitical Factors
The recent Israel-Iran conflict escalation temporarily sent crypto prices lower amid “doomsday” scenario fears. However, markets have since recovered as tensions appear to ease.
Trade tensions and tariff concerns remain factors in Fed decision-making, though some officials now view these risks as manageable.
