CMC Markets analyst Carlo Pruscino suggests that while the Federal Reserve is expected to hold rates steady this month, an unexpected rate cut could propel Bitcoin (BTC) toward new all-time highs.
Early Fed Rate Cuts May Accelerate Bitcoin’s Rally
Pruscino told Cointelegraph:
"If the two additional rate cuts arrive much earlier than anticipated, it would substantially influence Bitcoin’s price trajectory—potentially pushing BTC toward $112,000, a key psychological threshold for traders."
Bitcoin peaked at $111,970** on May 22 (per CoinMarketCap) but has since corrected to **$102,766. Despite this, markets overwhelmingly expect the Fed to maintain rates at 4.25%–4.50% in its June 18 decision (97.5% probability via CME FedWatch).
Key Unknowns: Tariffs and Employment Data
Pruscino notes the Fed has "sufficient data" but faces uncertainty from Trump’s tariff policies. A sustained risk-on environment is needed for BTC to break past $112K, with catalysts like strong employment data potentially driving momentum.
Upcoming Catalysts:
- June 6 U.S. jobs report: A weak print could hasten rate cuts, boosting BTC.
- Strong employment numbers (>250K jobs) may delay Fed easing, pressuring crypto markets.
👉 How Fed policies shape crypto markets
FAQ: Fed Rate Cuts & Bitcoin
Q: How do Fed rate cuts affect Bitcoin?
A: Lower rates typically weaken the dollar, making scarce assets like BTC more attractive as hedges against inflation.
Q: Why is $112K a psychological level for BTC?
A: It represents a 2.5x gain from BTC’s 2021 peak, aligning with institutional price models and trader profit-taking zones.
Q: Could tariffs delay Fed action?
A: Yes—trade policy volatility may force the Fed to prioritize economic stability over rate adjustments.
Final Thoughts
While macro uncertainties persist, Bitcoin’s resilience highlights its growing role as a macro asset. Pruscino emphasizes:
"Risk appetite must align with clear catalysts for BTC to sustainably surpass $112K."
📌 Remember: Trading involves risk. Conduct independent research before investing.