Ripple Ends SEC Appeal, Targets ETF Surge as BTC Hits $107K
Bitcoin Faces Pressure Amid US Inflation and Trade Tensions
Market Sentiment Affected by Economic Indicators
Recent developments in the US economy have placed significant pressure on Bitcoin (BTC), particularly as inflation data and trade issues emerge. The Core Personal Consumption Expenditures (PCE) Price Index for May showed a year-on-year increase of 2.7%, slightly up from April’s 2.6%. This uptick has tempered expectations for a Federal Reserve interest rate cut in the third quarter. According to the CME FedWatch Tool, the likelihood of a rate reduction in September has decreased from 93.2% to 92.5%.
The inflation data may also reflect the initial impacts of tariffs, reinforcing Fed Chair Powell’s cautious approach to monetary policy. However, declines in personal income and spending have somewhat mitigated the inflation figures’ influence on rate cut predictions. Personal income dropped by 0.4% month-on-month in May, contrasting with a 0.7% increase in April, while personal spending fell by 0.1% after a 0.2% rise the previous month. These trends could indicate a softer inflation outlook, potentially leading to a more dovish stance from the Fed.
Trade Developments Impacting Risk Appetite
The announcement from US President Trump regarding the termination of trade discussions with Canada has further influenced market sentiment. On June 27, Trump stated:
“(Canada) has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country. They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately.”
Additionally, Trump indicated that tariffs on Canadian goods would be announced within a week. This escalation in trade tensions has previously contributed to a decline in Bitcoin’s value, dropping from a peak of $111,917 to a low of $100,424 prior to the Middle East conflict.
Positive Trends in Bitcoin-Spot ETF Inflows
Despite these market challenges, the US bitcoin-spot ETF sector has shown resilience, contributing to upward momentum for BTC. According to Farside Investors, significant inflows on June 27 included:
- Fidelity Wise Origin Bitcoin Fund (FBTC) with net inflows of $165.5 million.
- ARK 21Shares Bitcoin ETF (ARKB) attracting net inflows of $150.3 million.
- Bitwise Bitcoin ETF (BITB) receiving net inflows of $11.6 million.
With BlackRock’s iShares Bitcoin Trust (IBIT) flow data still pending, total inflows into US BTC-spot ETFs have reached $344.5 million. This market segment is on track to extend its inflow streak to 14 consecutive days, which has been crucial in stabilizing Bitcoin’s price fluctuations and enhancing interest from mainstream businesses.
Bloomberg Intelligence’s Senior ETF Analyst Eric Balchunas noted:
“Speaking of bitcoin’s volatility, here’s a chart showing the ratio of IBIT’s 60-Day volatility to SPX. It was 5.7x more volatile a year ago, now it’s barely over 1 (meaning about same vol as US stocks).”
BTC Price Forecast: Influences and Scenarios
On June 27, Bitcoin experienced a slight increase of 0.15%, partially recovering from a 0.39% decline the previous day, closing at $107,130. The short-term price trajectory of BTC will be influenced by several critical factors, including signals regarding Fed rate cuts, trade developments, the ongoing ceasefire between Iran and Israel, and ETF inflows.
Potential Market Scenarios
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Bearish Outlook: Heightened tensions in the Middle East, legislative hurdles, renewed trade conflicts, hawkish signals from the Fed, and potential ETF outflows could drive Bitcoin towards the 50-day Exponential Moving Average (EMA), potentially dipping below the $100,000 mark.
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Bullish Outlook: If the ceasefire between Iran and Israel holds, bipartisan support for cryptocurrency legislation emerges, trade tensions ease, the Fed adopts a dovish stance, and ETF inflows continue, Bitcoin could revisit its all-time high of $111,917.
In summary, the interplay of economic indicators, trade relations, and ETF dynamics will be crucial in shaping Bitcoin’s price movements in the near future.
