Bitcoin Surges Past $104K as Trump Calls for Fed Rate Cuts

Bitcoin has surged past $104,000 as Trump pushes for Fed interest-rate cuts. Strong US employment data contrasts concerns about a potential liquidity trap, raising questions about Bitcoin’s future trajectory.

Bitcoin hit a significant milestone recently, soaring past $104,000, just as US President Donald Trump set his sights on demanding interest-rate cuts from the Federal Reserve. This marked a notable shift from his previous focus on figures like Elon Musk, underlining the political stakes intertwined with financial markets. This uptick comes despite strong employment data but also raises concerns over the potential for Bitcoin prices to take a dive.

As trading kicked off on June 6, Bitcoin (BTC) rose 2.5%. Following a turbulent period amidst the conflict between Trump and Musk, markets responded to new data suggesting inflation might be less of a concern. Trump took to his Truth Social platform, voicing his frustration, “Too Late at the Fed is a disaster!” His criticisms of both the Fed’s overall strategy and Chair Jerome Powell often revolve around pushing for rate cuts in 2025, which he argues would support riskier assets, including cryptocurrencies.

Trump drew attention to Europe’s monetary policy, noting, “Europe has had 10 rate cuts, we have had none. Despite him, our Country is doing great.” In a bold call for action, he urged the Fed to go for a “full point, Rocket Fuel!” However, the prevailing sentiment among investors, as reflected in CME Group’s FedWatch Tool data, suggests that anticipated cuts are unlikely to occur before the Fed’s September meeting.

Meanwhile, the latest non-farm payrolls data from the US Bureau of Labor Statistics indicated a stable labor market, with employment rising by 139,000 in May and the unemployment rate holding steady at 4.2%. This statistic might reinforce the Fed’s current stance rather than push for cuts, keeping Bitcoin traders on their toes.

Turning to Bitcoin specifically, insights from trader TheKingfisher pointed to potential price volatility ahead. They highlighted concerns about a possible “liquidity trap,” warning that significant long liquidation clusters lie between $99,000 and $102,000. This could lead to a dramatic price drop if market dynamics shift unfavorably. The trader stated, “Normies see support; we see a liquidation trap,” indicating a divide in market interpretation. If too many trades get liquidated at those lower levels, it can create a downward spiral.

Investors are now left nervously watching both Bitcoin’s price trajectory and Federal policy decisions as they navigate this volatile economic landscape. It’s essential to note that any investing carries risks, and potential traders should conduct thorough research before diving into the market.

In summary, Bitcoin is experiencing a rebound, recently surpassing $104,000, fueled by Donald Trump’s latest demands for interest-rate cuts amid solid employment data. However, caution arises as traders express worries about a looming liquidity trap which could trigger a significant price drop. With the Fed’s actions and data from employment reports playing pivotal roles, the cryptocurrency market appears to be on shaky ground as it faces potential downward pressures.

Original Source: cointelegraph.com