Bitcoin (BTC) has recovered a significant portion of its weekly losses, climbing 2.56% to around $67,480 on July 26. This rebound comes as traders prepare for former President Donald Trump’s keynote speech at the Bitcoin 2024 conference in Nashville on July 27, while also awaiting crucial US inflation data.
Trump Speech Fuels Market Optimism
Market speculation is rife that Trump might announce a strategic Bitcoin reserve policy if he wins reelection in November. The prospect of the United States, the world’s leading economy, potentially becoming a Bitcoin buyer has bolstered market sentiment. Markus Thielen, CEO of 10x Research, noted that “nobody wants to short Bitcoin into the weekend,” highlighting the influence of the powerful crypto lobby, which has raised $150 million for the Crypto Super PAC.
BTC/USD daily price chart. Source: TradingView
Inflation Data and Rate Cut Expectations
Bitcoin’s gains are also supported by the anticipation of the US Personal Consumption Expenditures (PCE) data, a key inflation metric favored by the Federal Reserve. The core PCE Price Index, excluding volatile food and energy prices, is expected to rise by 0.1% month-on-month in June, matching May’s increase. Annually, it is projected to grow at 2.5%, slightly below the previous 2.6% but still above the Fed’s 2% target.
Target rate probabilities for September Fed meeting. Source: CME
Recent comments from Fed Chairman Jerome Powell have fueled expectations for two interest rate cuts by year-end, with traders pricing in a 25 basis points cut in September and increasing bets on a similar move in December. Lower rates are typically bullish for non-yielding assets like stocks and cryptocurrencies, contributing to Bitcoin’s recovery.
Technical Analysis
On the technical front, Bitcoin’s price has bounced off its 50-day exponential moving average (50-day EMA), which has acted as a support level multiple times recently. As of July 26, BTC is targeting the upper trendline of its descending channel pattern, around $68,350, representing a potential 2.50% increase from current levels.
BTC/USD daily candle price chart. Source: TradingView
Additionally, this move could trigger a classic inverse-head-and-shoulders (IH&S) pattern, potentially leading to further gains in August. If the IH&S pattern plays out, Bitcoin could see an upside target of around $87,440 by October. However, a pullback from the neckline could invalidate this bullish setup, potentially pushing prices below $60,000 in August.
