Bitcoin (BTC) declined by 1.0% to $118,097
this week, yet it remains within its primary target range of $117,000–$127,000.
The market now appears to be in a holding pattern, awaiting the next major
move. On the surface, most trade barriers seem to have been cleared with recent
trade deals made between the U.S., Japan, and the EU. However, U.S.-China
tensions have resurfaced following negotiations in Stockholm that failed to
produce the expected 90-day trade truce. The U.S. reportedly demanded that
China stop purchasing Russian oil within ten days, coinciding with the
approaching deadline for a resolution in the Ukraine conflict. China's apparent
refusal has put the truce on hold and potentially linked it to progress in the
Russia-Ukraine peace track.
This geopolitical uncertainty may explain the
SEC’s decision to delay reviewing the application for the Truth Social Bitcoin
ETF, which is tied to Donald Trump. The delay seems strategic, especially if
the U.S. is preparing for further escalation with Russia and China. Should
market conditions deteriorate, the ETF would avoid launching during a
correction and instead gain approval just as prices reach or recover from a bottom.
The SEC now has until September 18 to decide, extending the review window well
past the original August 4 deadline.
Institutional appetite has also slowed. Last
week saw just $410.0 million in Bitcoin ETF inflows, a significant drop from
the previous week’s $2.94 billion. ETFs from BlackRock (IBIT), Fidelity (FBTC),
and Grayscale (GBTC) all saw reduced participation, suggesting a pause in large
investor activity.
Attention has now shifted to two critical
market drivers: the upcoming Federal Reserve (Fed) policy decision and earnings
from U.S. tech giants. Tensions between Trump and Fed Chair Jerome Powell
flared up again last week, with Trump levelling sharp criticism and even joking
about Powell’s removal. Yet, after visiting Fed headquarters on Thursday, Trump
changed his tone, encouraging Powell to make the “right” decision, clearly
alluding to a rate cut. While markets currently price in only a 3.0% chance of
a cut this July, there remains the possibility that Powell yields to political
pressure. If the Fed does cut rates unexpectedly, Bitcoin could stage a rapid
rally toward the upper end of its current range at $127,000.
Corporate earnings may also provide a boost.
Alphabet (GOOG) and Tesla (TSLA) posted strong results last week, following
Netflix’s (NFLX) solid report. Now investors are waiting on Microsoft (MSFT),
Meta (META), Apple (AAPL), and Amazon (AMZN), with broadly positive outcomes
expected. Strong tech earnings could support broader risk appetite, benefiting
the crypto market.
Technically, the outlook for Bitcoin remains
unchanged. It continues to trade within its $117,000–$127,000 target range,
which is a sign of strength. A breakout above this range could trigger a sharp
rally toward the next major target at $155,000–$165,000. At that point, taking
profits may become a reasonable consideration. On the downside, immediate
support is seen between $107,000 and $109,000.