July Rate Cut Off the Table as Markets Focus on Bitcoin’s $109K and Ethereum’s $2,500 Milestones

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The cryptocurrency market is navigating a pivotal moment, with macroeconomic uncertainty shaping investor sentiment and price action. As the Federal Reserve maintains a cautious stance on interest rates, digital assets like Bitcoin and Ethereum are testing critical technical levels amid shifting ETF flows, on-chain developments, and institutional movements.

Macroeconomic Crossroads: Rate Cut Hopes Fade

All eyes are on the Federal Reserve as expectations for a July rate cut have largely diminished. Despite recent signs of cooling inflation, Fed officials—including Chair Jerome Powell—have emphasized the need for further data confirmation before making any policy adjustments. Concerns remain that tariff-related price pressures could trigger persistent inflation, prompting the central bank to hold steady.

Officials widely agree that current monetary policy is in a "good place," reducing urgency for immediate changes. Most now anticipate potential rate cuts in the fall or later in 2025, depending on labor market trends and inflation data. While employment indicators show some softening, they haven't yet signaled a significant downturn—giving the Fed room to wait.

This cautious approach has influenced broader financial markets. On Thursday, U.S. equities rallied, with tech and banking stocks leading gains. The S&P 500 and Nasdaq Composite closed near all-time highs. Meanwhile, Treasury yields declined across the board, with 7-year yields dipping below 4.0%. The U.S. dollar index dropped for the fourth consecutive day, hitting a three-year low.

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Despite the delay in rate cuts, market pricing still reflects growing confidence in at least two rate reductions this year—highlighting underlying optimism about future economic conditions.

Hong Kong Reinforces Its Position in Digital Asset Innovation

Regulatory clarity is emerging as a key driver of institutional adoption. Hong Kong recently released its Digital Asset Development Policy Declaration 2.0, signaling a new era of “institutionalization, scaling, and globalization” for digital assets in the region. Spearheaded by HashKey Group Chairman Xiao Feng, the policy outlines a robust framework to attract global capital.

Key highlights include:

These measures strengthen Hong Kong’s appeal as a global hub for digital finance, combining regulatory rigor with competitive tax advantages and cross-border asset transparency.

Bitcoin Tests $109K Resistance Amid ETF Momentum

Bitcoin has rebounded nearly 10% from its recent low of $98,188, currently trading around $107,400. However, momentum has stalled as it approaches a major resistance zone between $108,000 and $110,000.

According to analysts, breaking above this range—and converting it into support—is essential for entering a new phase of price discovery. A confirmed close above $109,000 on the 4-hour chart could pave the way for fresh all-time highs.

Recent data shows mixed signals:

Glassnode analysis indicates strong support between $93,000 and $100,000. A drop below this range could trigger deeper corrections. Conversely, sustained buying pressure could push BTC toward $112,000 or higher.

CryptoQuant analyst Yonsei Dent points to the Market Value to Realized Value (MVRV) ratio, currently at 2.22—well below historical peaks above 3.7. This suggests room for upside if momentum returns, especially with continued ETF demand.

AlphaBTC notes that Bitcoin may retrace to the 38.2% Fibonacci level near $104,000–$105,000 to absorb liquidity before another attempt at $110K. Rekt Capital and MN Capital stress that overcoming resistance at **$108,877–$108,924** is critical for bullish continuation.

Ethereum Eyes $2,500 Breakout After Testing Macro Bottom

Ethereum trades at $2,439, just shy of a crucial resistance level at $2,500. Analyst Rekt Capital identifies **$2,200 as a macro bottom**, suggesting that reclaiming $2,500 would confirm stronger bullish momentum.

Unlike Bitcoin, Ethereum ETFs saw outflows of -$26.46 million on June 26, dampening short-term sentiment. Still, institutional interest persists:

On-chain activity reflects cooling interest in NFTs and RWA sectors, with both down over 2% in the past 24 hours. However, news that Fannie Mae and Freddie Mac may accept crypto as collateral has sparked discussions around “crypto-backed home loans,” briefly boosting related meme tokens like $farthouse.

Key Market Metrics (as of June 27, 12:00 HKT)

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BTC’s medium-to-long-term trend channel sits between $104,477 and $106,588, while ETH’s ranges from $2,425 to $2,474. Prices above these upper bounds signal bullish momentum.

Upcoming Catalysts and Token Unlocks

Several events could influence market dynamics in the coming days:

Additionally:

These unlocks may introduce selling pressure, particularly for mid-cap tokens.

Institutional Moves Signal Growing Confidence

Recent headlines reflect deepening institutional engagement:

These moves underscore long-term confidence despite short-term volatility.

Frequently Asked Questions (FAQ)

Q: Why isn’t the Fed cutting rates in July?
A: Fed officials want more data to confirm inflation is sustainably cooling, especially amid potential tariff-driven price increases. They believe current policy is effective and prefer waiting until fall 2025.

Q: What does Bitcoin need to break $110K?
A: A sustained close above $109K with high volume is key. Continued ETF inflows and reduced fear of macro shocks would support breakout momentum.

Q: Is Ethereum still undervalued?
A: With its ecosystem leading in DeFi, NFTs, and Layer-2 scaling, many analysts believe ETH is undervalued relative to fundamentals—especially if it clears $2,500.

Q: How do token unlocks affect prices?
A: Large unlocks can increase sell pressure if recipients liquidate holdings. However, projects with strong use cases often absorb this impact over time.

Q: What role do ETFs play in current price action?
A: Bitcoin ETFs provide institutional-grade access and consistent demand. Their sustained inflows signal long-term confidence even during sideways markets.

Q: Can RWA tokenization drive the next bull run?
A: Yes—by bridging traditional finance with blockchain efficiency, RWA projects could unlock trillions in illiquid assets, fueling growth across DeFi and asset management.

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