Bitcoin Price If Fed Cuts Rate In July As Inflation Dips Below 2%

Bitcoin (BTC) has not made any meaningful gains in the last six days as it has remained stuck between $107,000 and $110,000. However, this might change this month because of the release of the Fed minutes on Wednesday and the FOMC meeting that will happen on July 30, 2025. If the Fed were to lower interest rates later this month as inflation drops below 2%, how would it affect the Bitcoin price?

Will the Federal Reserve Trim Interest Rates in July?

Data from the CME FedWatch Tool shows that 95% of investors are expecting that the Federal Reserve will not change interest rates during the July 30 meeting. The reason behind this is the report released last week on the US jobs market performance in June, which showed that the US economy had created 147,000 new jobs during the month.

Bitcoin price may have already factored in the possibility that there will be no changes in the interest rates this month. However, there is debate about US inflation dropping, which might change the stance of investors and lead the Fed to change the rates.

This speculation is coming from the Truflation US Inflation Index, which has dropped from 2.27% to 1.70% in less than two weeks, with the decline coming right before the release of the CPI data on July 15.

If the inflation data that will go out next week also supports this decline, it may be a good thing for the BTC price because it will increase the likelihood of the interest rate dropping.

At the same time, the Fed will publish its minutes for the May meeting on July 9. The market is waiting for the report to understand the sentiment that Fed officials have toward inflation. If the report shows that the officials are no longer concerned about inflation, the price of Bitcoin might start to recover.

However, even if consumer prices drop and the Fed minutes come in positive, there is a zero chance that the interest rate will change this month. Instead, 61% of investors are expecting the first rate change of a 25% drop to happen in September.

Bitcoin Price Targets All-Time High if Fed Lowers Rates

In case the Federal Reserve does reduce interest rates this month, Bitcoin price might experience a strong move to all-time highs, considering that most traders are not considering the possibility of this happening yet.

If this happens, the next all-time high will likely be at $113,913, going by the bullish pattern on the four-hour chart. This pattern usually shows that the price is about to either gain or crash, depending on whether it overcomes resistance or breaks below the support level.

The bullish Bitcoin price prediction seen in this pennant indicates that a 4.95% surge might be on the way if BTC price moves above the resistance level of $108,547, and this might drive BTC to $113,913, marking a fresh high for the largest crypto asset.

Buyers might be the main factor behind such a rally because the RSI is standing at 51 to show that the current momentum is bullish, and there is room for Bitcoin to make additional gains. The same is shared by the AO bars that have turned green despite remaining negative, which shows that bearish traders are losing control.

To sum up, if inflation falls when the Fed releases consumer price data next week and this forces it to lower the interest rates, then the Bitcoin price may form a new all-time high before the end of July. However, if it does not happen and there is no other positive factor to support gains, the price might continue to struggle because of uncertainty.

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muthoni

Muthoni Mary is a seasoned crypto market analyst and writer with over three years of experience decoding blockchain trends, price movements, and market dynamics. She holds a Bachelor’s Degree in Commerce (Finance) from Kenyatta University, blending a solid academic foundation with a sharp eye for technical analysis and a deep understanding of on-chain data. Her work delivers clear, data-driven insights that empower investors to navigate the fast-evolving digital asset space with confidence. When she’s not analyzing the markets, Mary enjoys reading and travelling.

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