Bitcoin steadies near $118,000 as analysts see Fed holding rates again
The Federal Reserve is widely expected to leave interest rates unchanged on Wednesday, with traders focused on Chair Jerome Powell’s guidance and Thursday’s Personal Consumption Expenditures (PCE) inflation report for cues on when cuts might begin.
CME FedWatch shows overwhelming odds of no change, and Polymarket contracts for “no change” traded around the high‑90s ahead of the Fed’s meeting.
“Markets are bracing for a double‑feature this week: a Fed decision that’s widely expected to be a hold and a potentially pivotal PCE print that could tip the scale toward rate cuts later this year,” said 21 Shares Research Strategist Matt Mena, who added that job openings at 7.437 million and an openings‑to‑unemployed ratio near 1.06 point to continued labor market rebalancing.
Mena stated that a softer PCE and a substantive White House crypto policy framework could see bitcoin reclaim $120,000 and “push into price discovery.” A White House working group, formed from a mix of federal agencies, shared recommendations for a crypto "golden age" but made no mention of a Bitcoin reserve.
BTC hovered near $118,000 heading into the Federal Open Market Committee session, while altcoin majors like ETH were flat.
Options and outlook
Options positioning leaned positively but signaled caution. Nansen Research Analyst Nicolai Sondergaard told The Block that bitcoin options flow tilted bullish, with block call and spreads centered between $118,000 to $120,000. “That’s upside exposure, but hedged and controlled, not a moonshot bet. It says: we like higher, but we’re managing risk tightly,” he said.
Sondergaard added that put volumes were light with a low put/call ratio, indicating traders remain “bullish lean, but not euphoric.”
Liquidity desks flagged a narrow trading range. QCP Capital said bitcoin remains range‑bound, with bids around $116,000 and resistance near $120,000, while ETH is “losing steam” below $4,000. The firm still sees new highs as plausible on continued institutional flows and policy tailwinds, but warned that markets have “failed to respond” to good news — a late‑cycle tell — and highlighted crowded dollar shorts could spark a USD squeeze and weigh on risk assets.
Macro signals
Adding to the day’s policy tone, President Trump said the Aug. 1 tariff deadline will not be extended, reinforcing near‑term uncertainty over trade as investors will likely parse Powell’s remarks for any acknowledgment of labor cooling and inflation progress.
Meanwhile, fresh macro data arrived before the meeting, fueling a call for lower rates from President Trump.
The advance estimate showed Q2 real GDP grew at a 3.0% annualized pace, beating expectations, while the core PCE price index rose 2.5% in the quarter. Separately, ADP reported 104,000 private‑sector jobs added in July, the strongest gain since March.
After today’s likely hold, traders look ahead to the September meeting for possible rate cuts, contingent on cooling inflation and stable labor prints. Katalin Tischhauser, head of research at Sygnum Bank, noted that September‑cut odds have cooled to about 50%–60%, consistent with past cycles in which elevated easing probabilities faded into the decision window.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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