Bitcoin Market Update: Key Levels and Fed Interest Rate Insights

Key Insights:

• The likelihood of an interest rate cut by the Federal Reserve this week stands at less than 0.1%.
• Bitcoin’s (BTC) valuation could plummet to as low as $92,000 if critical support levels break.

Bitcoin’s price struggled to surpass the resistance barrier at $110,000 on Tuesday amidst escalating geopolitical tensions. Since June 5, the cryptocurrency has consistently faced challenges in breaching the $112,000 mark.

Interest Rates Held Steady

Current market analysis indicates a 99.9% probability that the Federal Reserve will maintain interest rates between 4.25% and 4.50%, with merely a 0.1% chance of a 0.25% cut. Market expectations suggest that any downward price movements resulting from unchanged interest rates have likely already been factored in.

As the Federal Open Market Committee (FOMC) meeting convenes, all eyes are on Jerome Powell, the Chair of the Federal Reserve. There is significant pressure from political leaders for the Fed to lower rates, which could influence market sentiment.

Market analysts are particularly interested in Powell’s commentary during the FOMC news conference, with one wealth manager indicating that a dovish tone from Powell could ignite bullish trends for Bitcoin. Additionally, if geopolitical risks lessen, it may lead to quick gains for the cryptocurrency, targeting short positions.

Bitcoin’s Market Dynamics

Recent shifts in Bitcoin’s funding rates have turned negative, particularly in light of heightened tensions in the Middle East, creating conditions for a potential short-squeeze if sentiment shifts. Furthermore, platforms like Polymarket assess a 42% chance that Bitcoin’s price will fall to $100,000 by the end of June, while there is a 23% likelihood of surpassing the previous all-time high of $115,000.

Key Resistance and Support Levels

For Bitcoin to sustain its upward movement, it must convert the previous all-time high of $112,000 into support. Initially, achieving a position above the psychological level of $108,000 is crucial, as this threshold triggered a significant rally earlier in May.

Additionally, there is a notable supply zone ranging from $109,000 to $110,500 that bulls must penetrate to facilitate an upward trajectory.

Conversely, bearish traders are actively working to uphold resistance around $106,000, enhancing the risk of a price decline. A key point to monitor lies between $104,000, where the 50-day simple moving average is located, and recent lows of $102,800. A breach below this range may initiate a retest of the critical $100,000 psychological level, with the 100-day and 200-day moving averages situated at $95,800 and $94,600, respectively.

Market experts highlight Bitcoin’s resilience, fueled by ongoing institutional accumulation. Notable buying behavior from entities such as Metaplanet and Bitcoin ETFs has been observed, which have seen continued inflows.

Liquidation Clusters and Market Sentiment

The liquidation heatmap for Bitcoin trading indicates significant liquidity concentrations around the all-time high close to $112,000. A decisive break through this level could trigger a cascade of liquidations, driving prices upward towards the next liquidity zone at $114,000.

On the downside, there are increasing buy orders consolidating around the $100,000 mark, with the next major liquidity cluster identified between $92,000 and $93,000.

This analysis does not serve as investment advice. Every trading decision carries risks, and it is essential for readers to conduct thorough research before making financial commitments.