Powell, tariffs, and BTC: The perfect storm for Bitcoin’s next big move?
Key Takeaways
Bitcoin sits at a pivotal level, with liquidity clustering around $123k and $112k–$115k, as macro catalysts and fiscal easing collide.
Just as markets brace for a Fed pivot, tariff relief drops into the mix. Perfectly timed, or perfectly planned?
Either way, Bitcoin [BTC] looks primed for a move. It either breaks clean, or we see a rejection that flushes back into the $112k-$115k demand zone to retest bid depth.
With liquidity now clustering on both sides, the stage is set. Bitcoin’s next directional impulse will likely be triggered by whichever zone gives way first, all while macro headwinds start circling back in.
Markets brace for Powell
July wraps with macro risk dialed up. Fed Chair Powell opens the next FOMC setup with a fresh read on the economy, and the market’s locked in on inflation risk for good reason.
June CPI came in hot at 2.7% YoY, a four-month high and the first real 0.3% MoM jump this year. What’s more, that’s two back-to-back monthly upticks, breaking the prior trend of soft prints that averaged -0.2% MoM.
Put simply, the disinflation narrative just took a hit. With inflation stickier than expected, the market is now questioning just how dovish the Fed can afford to be heading into H2.
Source: TradingEconomics
The CME FedWatch Tool shows traders are fully pricing in a “hold” at the 30th of July FOMC meeting.
In fact, there’s a 97.4% chance the Fed keeps rates locked at 425-450 bps, while a 25 bps cut is getting just 2.6% odds, showing there’s little conviction around immediate easing.
Naturally, the focus now shifts to how Bitcoin handles a macro tape that’s still tight on liquidity. Is tight policy the key reason BTC’s next leg higher keeps stalling out?
Bitcoin caught between policy and positioning
With no Fed pivot yet, Bitcoin’s next real liquidity injection clearly stems from fiscal relief, namely, the tariff unwind. Conveniently, it drops right into the FOMC window.
Take June’s tariff rollback headlines, for example. The U.S. reversed China import duties, delivering stealth fiscal easing even as the Fed remained hawkish.
The market caught on quickly. Bitcoin’s Coinbase Premium Index turned sustainably positive from mid-April, peaking at 0.105 in early June, right as those tariff headlines dropped.
Source: CryptoQuant
The price action followed through.
Bitcoin printed three green monthlies in a row, with June defending the $100k handle cleanly. That zone fueled a breakout to $123k by mid-July, locking in an 11.31% gain on the month.
Structurally, the setup favors a squeeze. Sticky CPI keeps rates high, while fiscal easing underpins the bid. With $9.5 billion in shorts parked at $123k, Bitcoin’s poised to rip into price discovery.