Bitcoin Price Falters as Fed and BoC Hold Interest Rates Steady

Bitcoin (BTC) price has gradually lost its initial July bullish momentum during the past three weeks. The flagship coin has consolidated in a choppy fashion during the past three weeks below $120k amid robust fundamentals, which ordinarily favors bullish sentiment.

According to market aggregate data from TradingView, BTC price slipped below $117k on Wednesday, resulting in the liquidation of long traders. However, Bitcoin’s OI-weighted funding rate has remained positive in the past 30 days, signaling the existence of macro bullish speculative trading.

Source: Coinglass

Bitcoin Price Falters on Uncertainty in Monetary Policy 

Wednesday’s 1.4 percent Bitcoin price drop to trade at about $116,246 during the mid-North American session was influenced by the high-impact news from major central banks. As Coinpedia reported, the Fed held its benchmark interest rate at 4.5 percent.

Earlier on Wednesday, the Bank of Canada held its key interest rate at 2.75 percent. As a result, the Bank of Japan (BoJ) is expected to hold its uncollateralized overnight call rate at 0.5 percent on Thursday.

The crypto market weakened on Wednesday after the Fed confirmed that it will continue to reduce holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The anticipated Quantitative Easing (QE) may not begin potentially until the fourth quarter of 2025, whereby President Donald Trump highlighted that a rate cut could happen.

Bigger Picture

The BTC/USD pair in the daily timeframe has signaled bullish sentiment in the long haul despite the midterm capitulation fears. From a technical analysis standpoint, BTC price has formed a bullish flag pattern, which could lead to a breakout towards $130k soon.

The macro bullish sentiment is bolstered by the rising demand from corporate investors led by Strategy (NASDAQ: MSTR). Additionally, the favorable regulatory outlook in the United States, as observed in the recent approval of in-kind creation and redemption of crypto assets ETPs by the SEC.