The bitcoin price is currently down 3% in morning trading, hovering near $77,000, as investors exercise caution ahead of the upcoming Fed rate decision and key data releases. According to Enflux, a market maker, traders are hesitant to drive the price higher due to uncertainty surrounding the Fed's decision and the impact of oil prices on inflation. With Brent crude remaining above $100, the inflation outlook is complicated, making it challenging for the Fed to adopt a dovish stance. Enflux notes that the market is operating under two competing assumptions: that geopolitical tensions will eventually ease, but not quickly enough to influence near-term policy, effectively pricing out rate cuts for June.
As a result, bitcoin has struggled to break above key technical levels, trading roughly 4% below its short-term holder cost basis. A decisive move above this level would likely require a clear signal from the Fed that oil-driven inflation is temporary. Meanwhile, a slowdown in AI demand, as reported by The Wall Street Journal, may also impact bitcoin's price, potentially easing miner-driven selling over time. However, this development adds another layer of uncertainty, keeping bitcoin trading in a narrow band as the market awaits clearer signals.