Matrixport: Bitcoin Fundamental Support Strong, Fed's Dovish Tone Provides Mild Upside Support

On June 27th, Matrixport released its weekly report which stated that during the FOMC meeting on June 18, 2025, Powell sent a hawkish signal. However, within less than a week, the overall tone of the Fed quickly turned dovish. Several directors successively expressed dovish views, and Powell himself appeared more moderate during this week's congressional hearing. This shift might have been influenced by political pressure. Shortly after the meeting, President Trump openly criticized the Fed's tightening stance, forcing the Fed to quickly revise its public communication. Inflation has dropped to 2.38%, only a step away from the Fed's 2% target, and the rationale for maintaining the status quo is gradually weakening. Last Friday, Governor Waller hinted at a rate cut discussion at the July FOMC meeting, and on Monday, Governor Bowman expressed a similar view. The Chicago Fed President Gulspie further downplayed the inflationary impact of tariffs, strengthening the market's expectation of a "dovish Fed." Although Powell and some economists had warned that tariffs might push inflation back above 3%, this has not actually happened so far. The unemployment rate has also remained at 4.2% for nearly 12 months, contrary to the earlier expectation of a softening labor market. Powell did not refute the dovish comments and mentioned that as long as inflation remains moderate, the timing of rate cuts could be advanced. Although the probability of a rate cut in July is still low, the Fed is likely to provide advance guidance on potential policy adjustments in September at the July 30th meeting. With many share buybacks suspended in July, the earnings season may become one of the key variables dominating market sentiment. After the U.S. military's airstrikes in Iran earlier this week, Bitcoin briefly fell to the 21-week moving average ($98,532), which serves as both a critical technical support and a bullish-bearish dividing line. If the price fails to promptly return above the moving average, the market may face the risk of a summer correction. Maintaining the benchmark of "seasonal range-bound trading" and anticipating that the Fed's dovish tone will continue to provide moderate upward support for Bitcoin. If more explicit signals of rate cuts emerge in the future, the risk-reward ratio for buying on dips may further improve.