Key BTC price levels to watch as fed rate cut hopes fade

Key takeaways:

• Fed rate interest cut odds this week are now less than 0.1%.

• BTC price may drop as low as $92,000 if key support levels are broken.

Bitcoin’s (BTC) price failed another attempt at breaking above the resistance at $110,000 on June 17, as tensions in the Middle East escalated. Since June 5, BTC price has been unable to break above $112,000.

With the Federal Open Market Committee (FOMC) meeting set to take place June 17-18, markets could see volatile price swings toward key BTC price levels over the next few days. The policy decision on the interest rate will be made on June 18 at 2.00 pm ET.

99.9% chance interest rates won’t change

There is a 99.9% chance that the current interest rates will remain between 4.25% and 4.50%, leaving just a 0.1% probability of a 0.25% rate cut, according to CME’s FedWatch tool.

However, market participants believe that any bearish price action from unchanged interest rates is already priced in.

Market participants have now turned their focus on Jerome Powell, the US Fed chair’s speech after the FOMC meeting. The Federal Reserve and Powell are under pressure from US President Donald Trump to lower interest rates. 

Therefore, the market will keenly watch Powell’s language at the FOMC press conference to see if there is any shift in tone.

“If Powell comes out dovish, that’s extra fuel for the bulls,” said private wealth manager Swissblock in a June 17 post on X, adding that a de-escalation in geopolitical risk will see Bitcoin “move fast, targeting bear liquidations.”

Swissblock managers also pointed out that Bitcoin’s funding rates turned negative following the escalation of Israel-Iran hostilities, which increases the chances of a “short-squeeze” if the narrative changes. 

“With negative funding, it’s the bears who are now overexposed, … and that opens the door for a potential squeeze.”

Meanwhile, Polymarket now says there’s a 42% chance that Bitcoin’s price will drop to $100,000 by June 30, with a 23% possibility of hitting new all-time highs above $115,000.

Key Bitcoin price levels to watch

Bitcoin must flip the all-time high at $112,000 into support to continue its uptrend into price discovery. 

For this to happen, BTC/USD must first regain its position above the psychological level at $108,000. The last time this level was broken was on May 21, when Bitcoin rallied to new all-time highs. 

Above that, there is a major supply zone stretching from $109,000 to $110,500, which the bulls will also have to overcome.

Conversely, the bears will attempt to keep the $106,000 resistance in place, increasing the likelihood of pulling the price lower. A key area of interest lies between $104,000, where the 50-day simple moving average (SMA) currently sits, and the previous range lows at $102,800, reached on June 13. 

Below that, the next move would be a retest of the $100,000 psychological level, with the 100-day and 200-day SMAs at $95,800 and $94,600 being key levels to watch below it.

Related: Bitcoin price top metric with 10-year+ record stays ‘neutral’ at $112K

Crypto trading firm QCP pointed out that Bitcoin’s price remains resilient, underpinned by continued institutional accumulation, citing persistent buying by Metaplanet and Strategy and spot Bitcoin ETFs, which have recorded their seventh consecutive week of inflows. 

In a June 16 Telegram note to investors, the firm said:

“The market seems to have rediscovered its footing, particularly after BTC held above the key psychological threshold of $100k despite the initial shock.”

The Binance BTC/USDT liquidation heatmap shows the biggest liquidity cluster near the all-time high of around $112,000.

If the $112,000 level is broken, it could spark a liquidation squeeze, forcing short sellers to close positions and driving prices toward $114,000, the next major liquidity cluster.

On the downside, bid orders are building up around $100,000, with the next major cluster sitting between $92,000-$93,000. 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.