On Thursday, shortly after 9:00 AM EST, Bitcoin briefly returned to the $65,000 mark, continuing its gradual recovery spurred by the Federal Reserve's decision to leave interest rates unchanged. However, heightened volatility was observed immediately after the announcement during trading: the asset's price dropped to $63,199 before beginning a steady climb to a session high of $65,100.
Although the recovery to the $64,000 level occurred within two hours, the ascent to $65,000 proved more challenging and was accompanied by several pullbacks around the $64,500 resistance level. After breaking through the $64,500 level, the final push to the daily high took less than four hours. Profit-taking at the peak subsequently led to a price decline; as of 2:25 PM EST, Bitcoin was trading near $64,700, reflecting a modest daily gain of 0.5%. This movement resulted in an increase in the total market capitalization to $1.3 trillion, allowing the asset to claim a monthly gain exceeding 10% for July.
Despite lower intraday volatility compared to the previous 24-hour period, the market witnessed significant forced liquidations of leveraged positions. The total volume of liquidations across the cryptocurrency ecosystem over the past day exceeded $243 million, primarily driven by the liquidation of long positions totaling over $143 million. Specifically for Bitcoin, long and short position liquidations were evenly distributed—approximately $23 million each.
Beyond monetary policy signals, digital assets, like traditional markets, were factoring in broader U.S. macroeconomic data, including a 1.5% growth in U.S. GDP for the second quarter. Despite the positive nature of this data, it highlights challenges in supply chains and an economic slowdown caused by geopolitical tensions in the Middle East.
Markets also assessed the core Personal Consumption Expenditures (PCE) index, which rose by 3.2%, indicating sustained household demand despite macroeconomic headwinds. On the other hand, the core PCE price index slowed to 3.3% year-on-year, aligning with market expectations and signaling a gradual easing of price pressures.
However, further progress in reducing core PCE inflation remains constrained by persistent geopolitical risks, as evidenced by Iran's unexpected strikes on American targets over the past 48 hours. As the latest round of hostilities has shown, any resumption of combat operations could push crude oil prices above the $90 per barrel mark.
If crude oil prices remain elevated above $90 per barrel due to concerns over supply disruptions, persistent inflationary pressure could increase the likelihood of further monetary policy tightening by the Federal Reserve, posing a potential obstacle for risk assets such as Bitcoin.
