Bitcoin’s Direction to Be Decided Soon; Hinges on June Rate Cut and Passage of the Clarity Act

▲ Bitcoin (BTC), U.S. dollar (USD)/ChatGPT-generated image ©

As the virtual asset market enters a period of consolidation following its steepest plunge in four years, macroeconomic indicators are being pointed to as the key factor that will determine Bitcoin’s (BTC) next $10,000 move.

According to DL News on February 16 (local time), Bitcoin has slid about 28% over the past month, returning to levels seen before Donald Trump’s victory in the 2024 U.S. presidential election. Down 45% from its peak, Bitcoin is currently trapped in a range between $65,000 and $74,400, with investors locked in an intense standoff.

Ben Harvey, a researcher at digital asset investment firm Kirok, assessed that Bitcoin’s next major move will be driven more by macro variables than internal factors. Key catalysts include macroeconomic data that could alter the interest rate path, changes in the Treasury’s funding expectations, and inflection points in institutional demand as reflected in spot exchange-traded fund (ETF) flows. In particular, rate cuts, which lower borrowing costs and inject liquidity, are considered strongly bullish for risk assets such as cryptocurrencies. However, according to the CME FedWatch tool, the likelihood of the Federal Reserve cutting rates before its June meeting remains slim.

The growing dominance of macroeconomic indicators also reflects the absence of a clear narrative currently driving the crypto market. Last October, fueled by expectations surrounding Trump’s pro-crypto policies and the passage of key stablecoin legislation, Bitcoin surged past $126,000 to set a new all-time high. However, as subsequent digital asset legislation stalled and tangible commodities such as gold and silver led the market as defensive plays, many investors exited, draining liquidity from the market.

Market experts view the current sideways movement as a technical consolidation phase. Nathan Batchelor of crypto trading data platform BeYonD analyzed that the tax payment season and cyclical capital shifts back into the traditional financial system have recently pressured Bitcoin’s price. He projected that a decisive breakout above the $65,000 to $74,400 range will be necessary to determine the direction of the next $10,000 move.

Optimism for a rebound still persists. David Duong, Head of Institutional Research at Coinbase, stated that moderate inflation, healthy economic growth, and a potential Federal Reserve rate cut brought forward to June could support risk appetite. He identified $82,000 as a key resistance level that must be overcome for further upside. The passage of the U.S. crypto market structure bill, the Clarity Act, through Congress could also serve as a powerful catalyst to revive the sluggish market, though some caution that a careful approach remains necessary given the recent significant technical damage.

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