Bitcoin Price Prediction Ahead of Fed Interest Rate Decision

Key Insights

• Bitcoin price has crawled back in the past few days.
• The Federal Reserve will deliver its interest rate decision on Wednesday.
• The coin has formed an inverted cup-and-handle pattern.

Bitcoin price continued its recovery on June 16, rising to a two-week high of $66,350. The move placed BTC about 12.5% above its recent low near $59,000 as investors positioned ahead of the Federal Reserve’s policy decision this week.

While improving risk sentiment has supported the rebound, several macroeconomic and technical factors suggest that upside momentum remains fragile.

Bitcoin Price Climbs Ahead of Federal Reserve Meeting

Bitcoin price continued rising today, continuing the trajectory it started on June 5 when it plunged to a low of $59,000.

The coin is rising as investors wait for the upcoming Federal Reserve interest rate decision, which will happen on Wednesday this week.

Economists believe that the bank sees no urgency to cut interest rates, especially now that Kevin Warsh is the Chair. President Donald Trump nominated Warsh for the main reason of cutting rates, which he believes are at an elevated level.

This week’s developments have also convinced investors that the bank will not hike rates. The memorandum of understanding (MoU) made by the US and Iran has led to a sharp retreat of crude oil prices. WTI has already slumped below $80, and Brent is on its way there.

Data compiled by AAA shows that gasoline prices have started coming down, with the average one nearing the crucial support of $4 a gallon. These prices were above $4.5 at the highest point this year. Other prices, like fertilizer and transportation, will likely start coming down as well.

Still, in normal times, a case can be made for hiking interest rates. For one, the consumer inflation has remained above the Federal Reserve’s 2% target for five years. The most recent data showed that the Producer Price Index (PPI) soared to 6.5% in May.

At the same time, the labor market is strengthening. A report showed that the economy added over 172k jobs in May this year. It was the third consecutive time that the labor market released stronger-than-expected numbers.

Therefore, a dovish tone will likely be bullish for Bitcoin and other altcoins. It will also be bullish for the stock market as it will encourage investors to embrace risk. On the other hand, if the Fed signals that it will hike interest rates, there is a risk that these assets will reverse.

Fed Not the Only Moving Part

Still, it is worth noting that the Federal Reserve is not the only moving part in terms of Bitcoin prices. Another crucial crypto news to watch will be ETF flows as they will signal on whether American investors are buying or selling.

Despite the recent gains, data shows that spot Bitcoin ETFs shed $64 million in assets on Monday. The outflows brought the total monthly outflows to over $2.1 billion. These funds also shed $2.4 billion last month.

The other key moving part is the developments in the Middle East. Signs that the MoU is facing challenges will negatively affect Bitcoin and other risky assets.

BTC Price Prediction: Technicals Favor Caution

Technical indicators suggest that the current recovery has not yet altered Bitcoin’s broader bearish structure.

The Average Directional Index (ADX) has started declining, indicating that the strength behind the recent rebound is weakening. While this does not confirm a new decline, it shows momentum has moderated.

Bitcoin also remains below its 100-day moving average, signaling that sellers continue to control the broader trend.

More importantly, the chart continues to show the formation of an inverted cup-and-handle pattern. This structure is widely regarded as a bearish continuation setup and often precedes another leg lower after a temporary recovery.

If selling pressure returns, the first major support remains near $60,000. A breakdown below that level could expose the psychologically important $50,000 area.

For now, Bitcoin’s short-term direction will likely depend on three factors: the Federal Reserve’s guidance, institutional ETF demand, and whether buyers can invalidate the bearish technical structure by reclaiming key moving averages.

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