Bitcoin (BTC) is navigating a complex macroeconomic environment, with its price action tightly wound around the latest signals from the U.S. Federal Reserve and upcoming key economic data points. Following the Fed's recent decision to hold interest rates steady, the market has shown resilience. Currently, the BTC/USDT pair is trading around $108,654, marking a 1.28% increase over the past 24 hours. The trading range has been relatively tight, with a low of $107,152 and a high of $108,746, indicating a period of consolidation as traders digest the central bank's updated outlook. While the Fed's decision to maintain rates was widely expected, their quarterly economic projections revealed a more hawkish stance than anticipated. Policymakers now foresee only one 25-basis-point rate cut this year, a significant reduction from previous forecasts. Furthermore, they revised their projections to show weaker GDP growth and stickier inflation, creating a challenging backdrop for risk assets like cryptocurrencies. Despite this, Bitcoin's ability to hold its ground above key support levels demonstrates underlying strength, though the path forward is likely to be dictated by the next wave of macro catalysts.

Powell's Testimony and Core PCE Data Loom Large for BTC Price Action

All eyes in the financial world, from Wall Street to the crypto markets, are now turning towards Federal Reserve Chairman Jerome Powell's upcoming semi-annual monetary policy testimony. This event is a critical juncture where Powell will likely face intense questioning about the Fed's strategy amidst persistent inflation and a shifting economic landscape. Traders will be parsing every word for clues about the future interest-rate trajectory. Any perceived dovish tilt could inject fresh momentum into risk assets. As analyst Chris Weston noted, factors like anchored inflation expectations and early signs of a weakening labor market could compel the Fed to consider a more accommodative stance, potentially guiding towards a rate cut later in the year. A dovish signal from Powell could easily propel Bitcoin to test its recent high of $108,746 and push for a breakout towards higher resistance levels.

Inflation Metrics and Geopolitical Risks Add Complexity

Beyond Powell's testimony, the release of the core Personal Consumption Expenditures (PCE) price index on Friday will be another pivotal moment. As the Fed's preferred measure of inflation, this data will heavily influence their next moves. The market consensus is for a modest 0.1% month-on-month increase, which would support the case for eventual rate cuts and be bullish for Bitcoin. However, traders must also contend with external risks. Lingering geopolitical tensions, such as those involving Iran, could introduce volatility. While the immediate impact on oil markets has been contained, the potential for disruptions in crucial trade routes like the Strait of Hormuz remains a threat. According to a report from the South China Morning Post, the cost to insure vessels traversing the strait has already quadrupled, highlighting the underlying risk. A spike in oil prices resulting from these tensions could complicate the global inflation picture, potentially forcing the Fed to maintain its restrictive policy for longer and creating headwinds for BTC.

While Bitcoin consolidates, several altcoins are showing notable strength, suggesting a potential rotation of capital within the crypto ecosystem. Ethereum (ETH) has outpaced Bitcoin in the last 24 hours, rallying 3.13% to trade at $2,507. The ETH/BTC pair reflects this strength, climbing 2.6% to 0.02321, indicating that traders are favoring Ethereum in the short term. Another standout performer is Avalanche (AVAX), with the AVAX/BTC pair surging an impressive 6.73% to 0.0002267. This divergence suggests that while Bitcoin provides a macro bellwether, specific altcoin ecosystems are attracting significant speculative interest. Traders are closely watching these pairs for signs of a broader altcoin season. For Bitcoin, the immediate challenge is to break and hold above the $108,800 resistance. A failure to do so, particularly in the face of hawkish commentary from Powell or a hot PCE number, could see the price retest the 24-hour low near $107,150. The interplay between these technical levels and the week's major economic events will define Bitcoin's next significant move.