Bitcoin Price to Face Unexpected Fed Shock in Q3 or September

Renowned cryptocurrency analyst Benjamin Cowen has assessed the latest inflation data from the US and its potential macroeconomic impact on Bitcoin (BTC). According to the June PCE Price Index, there was a 0.1% month-on-month decrease, while core PCE showed a limited 0.1% year-on-year increase. These numbers were positively received by the markets.

The economy demonstrated resilience with a 1.5% annual growth in US GDP and low weekly jobless claims of 197,000. However, instead of experiencing a rapid decline, the Bitcoin price maintained a horizontal trajectory.

Cowen drew attention to internal divergences in the Fed's interest rate decisions, pointing out that three members of the FOMC voted for an interest rate increase, indicating that monetary tightening is not yet over. He noted that when 2-year US Treasury yields rise above the interest rate, the restrictive effect of monetary policy on the market weakens.

Cowen predicted a high probability of a surprise interest rate hike by the Fed in the second half of this year or in September, stating that such an increase would be a 'cold shower for investors' and could accelerate the flight from risky assets. He also suggested that the market bottom may not yet have been reached, with the most likely scenario being that Bitcoin will find its true bottom in the fourth quarter (Q4) of the year.