Will the Fed focus on breakevens, which are already at or below 2% in the near term, or on growing consumer concerns?
The Fed itself tends to trust breakevens because they reflect institutional capital allocation, while consumer surveys often lag and can be heavily influenced by the volatility of everyday costs like energy and food. Therefore, the argument that falling breakevens are bullish for bitcoin still stands.
But the central bank may not be entirely ignoring street sentiment, which can be self-reinforcing, especially if catalysts such as energy prices remain volatile.
And guess what? The ceasefire between the United States and Iran has collapsed. The two sides exchanged airstrikes early in the day, triggering a roughly 5% rise in oil benchmarks. Bitcoin fell back to $62,000 and could fall further if panic spreads across Wall Street later today.
Analysts are also monitoring the minutes of the Fed’s June meeting, scheduled for later today.
“Wednesday’s Fed minutes are the benchmark. With such long positions and such rich funding, a hawkish reading is exactly the spark that blows away leverage, and strategy clearance looms over every rally. We respect the bounce, we don’t trust it, and we keep an honest size in the minutes,” Marex analysts said in an email.
