Bitcoin holds strong near $119,000 as traders eye new record highs and await a major U.S. interest rate update.
- Bitcoin’s price is close to $120,000 but faces short-term resistance.
- Traders are watching the Federal Reserve’s rate decision and inflation data.
- Stablecoin liquidity remains weak, limiting strong price surges.
Bitcoin Price Stays Strong
Bitcoin briefly surged toward $120,000 but failed to move higher. Still, it holds above $119,000, giving hope to traders. Analysts say that if Bitcoin can stay over $117,000, new all-time highs could happen soon.
Trader Crypto Tony believes bullish momentum could grow if Bitcoin does not fall below recent support levels. Another analyst, Rekt Capital, warns that if Bitcoin breaks above current resistance but fails to hold, the price could stay in a sideways range.
Waiting on the Fed’s Rate Decision
This week, the Federal Reserve will decide if interest rates should change. On Wednesday, the Fed’s FOMC meeting takes place, followed by new inflation data on Thursday. These events could have a big impact on Bitcoin and other markets.
Analysts say that while no rate change is expected this time, traders will watch closely for signs of potential cuts later this year. U.S. President Trump is pressuring Fed Chair Jerome Powell to lower rates, but Powell has shown no signs of stepping down or giving in.
US-EU Trade Deal Helps Markets
Markets got a boost after the U.S. announced a major trade deal with the EU and Japan. The deal includes $750 billion in U.S. energy purchases and $600 billion in EU investments. Tariffs on Chinese goods are delayed for 90 more days.
This news caused the S&P 500 to open at record highs, which often signals stronger demand for risky assets like Bitcoin. Economic growth and higher money supply (M2) also support market confidence.
Bitcoin’s July Performance in Context
Bitcoin has gained about 11.3% this month. However, this is only slightly higher than its average July gains over the last 12 years. In fact, July 2022 saw a bigger increase of almost 17% during a bear market period.
Analysts note that Bitcoin needs to hold its early July breakout to keep momentum. Some expect a price target of $141,300 if gains continue. However, the next month might be slower, with Bitcoin historically showing smaller gains in August.
Low Stablecoin Reserves May Slow Rally
New data from CryptoQuant points to a lack of stablecoin liquidity. The Stablecoin Supply Ratio (SSR) shows rising Bitcoin prices without a matching increase in stablecoin inflows. This weakens buying power.
Analysts say this could signal a temporary pause in the Bitcoin rally. For strong price growth to return, the market may need more stablecoins to support higher volume trades.
Source: cointelegraph.com