Following the Federal Reserve’s decision to hold interest rates steady, Bitcoin briefly surged past $65,000 to a daily peak of $65,100 before facing selling pressure. It settled around $64,700, pushing its market cap to $1.3 trillion and keeping it on track for an over 10% gain in July.
Bitcoin Reclaims $65K as July Gains Top 10% After Fed Pause
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Key Takeaways
- Bitcoin touched $65,100 on Thursday after the Federal Reserve held interest rates steady.
- Volatility in Bitcoin and crypto markets triggered over $243 million in position liquidations.
- Ongoing U.S.-Iran tension and $90+ crude oil could prompt the Fed to raise interest rates.
A Choppy Road to the Daily Peak
Bitcoin briefly reclaimed the $65,000 threshold shortly after 9 a.m. EST on Thursday, continuing a gradual recovery triggered by the Federal Reserve’s decision to leave interest rates unchanged. However, immediate post-announcement trading saw increased volatility, with the asset dipping to $63,199 before mounting a steady advance to a session high of $65,100.
While the recovery to $64,000 materialized within two hours, the ascent to $65,000 proved more complex, characterized by multiple pullbacks around the $64,500 resistance level. Upon breaking through $64,500, the final push to the daily high took under four hours. Profit-taking at the peak subsequently drove prices back down; as of 2:25 p.m. EST, bitcoin was trading near $64,700, reflecting a modest daily gain of 0.5%. This movement brought total market capitalization to $1.3 trillion, positioning the asset for a monthly gain exceeding 10% for July.
Despite lower intraday volatility relative to the preceding 24-hour period, market leverage experienced notable forced unwinding. Liquidations across the broader crypto ecosystem exceeded $243 million over the past day, driven primarily by long liquidations totaling over $143 million. Within bitcoin specifically, long and short position liquidations were evenly split at approximately $23 million each.
Beyond monetary policy signals, digital assets like traditional markets digested broader U.S. macroeconomic data, including the 1.5% second-quarter U.S. GDP growth. While positive, the print highlights supply chain friction and economic drag stemming from geopolitical tensions in the Middle East.
Markets also weighed the underlying personal consumption expenditures (PCE) index, which grew 3.2%, indicating resilient household demand despite macro headwinds. On the other hand, the core PCE price index moderated to 3.3% year-over-year, aligning with market expectations and offering incremental price relief.
However, further disinflationary progress in core PCE remains constrained by ongoing geopolitical risks, as evidenced by Iran’s surprise strikes against American targets in the last 48 hours. As demonstrated in the last round of fighting, any return to combat operations will push crude oil prices above $90 per barrel.
Should crude oil remain elevated above $90 per barrel due to supply disruption concerns, persistent inflationary pressures could increase the likelihood of further monetary tightening by the Federal Reserve, presenting a potential headwind for risk assets like bitcoin.
