Bitcoin is approaching the critical turning point of $65,050, with market sentiment highly strained. CoinGlass data shows that once the price successfully holds above this level, short positions worth $619.87 million on centralized exchange platforms will be immediately liquidated, triggering a short squeeze. Conversely, if the price breaks below the support level of $62,012, long positions valued at $558.34 million will face liquidation risk. The accumulation of massive two-sided leveraged positions implies that regardless of which direction the price breaks, it will lead to significant volatility in the spot market.
Federal Reserve Chairman Warsh’s public remarks have driven a rapid recovery in Bitcoin, pushing it back above the $60,000 mark, confirming the high sensitivity of crypto assets to macroeconomic policy. Earlier, the market had fallen into panic due to political upheavals, with prices dropping to multi-year lows, but even minor adjustments in policy expectations have proven sufficient to trigger sharp corrections in asset prices. However, Bitcoin’s overall performance this year remains sluggish, with prices having more than halved from their peak earlier in the year.
The U.S. June employment report showed that only 57,000 new jobs were added, far below expectations, yet the unemployment rate unexpectedly fell to 4.2%. Analysts pointed out that a 0.3 percentage point decline in the labor force participation rate masked the true weakness in the market. More critically, average hourly earnings accelerated to 3.5% year-over-year, with wage growth becoming a pressure point that fuels inflation—a signal that Warsh views with the most concern. As long as wage increases remain elevated, market expectations for a rate hike in 2026 will be difficult to dispel.
The recent sharp decline in oil prices to pre-U.S.-Iran war levels is reshaping the logic of the inflation-versus-interest-rate debate. Market expectations suggest that the upcoming June CPI data may show a month-over-month decline in prices, further reinforcing expectations that the Federal Reserve will keep interest rates unchanged. Traders believe that lower borrowing costs would help improve liquidity, providing support for risk assets such as Bitcoin. At the same time, some investors are betting that the Federal Reserve will shift toward easing in the second half of the year, supporting “debasement” trades that include gold and Bitcoin.
Current market pricing indicates that the Federal Reserve may raise rates only once this year, and Warsh’s latest remarks have already led investors to scale back their bets on monetary tightening. Looking ahead, institutional ETF fund flows, geopolitical developments, and Federal Reserve rate expectations will emerge as the three core variables determining Bitcoin’s trajectory. If these factors gradually improve, the current sell-off may be viewed as a long-term buying opportunity; otherwise, high volatility will persist until the market finds a solid price floor. Even minor shifts in policy direction are becoming a key force in shaping the pricing of crypto assets.
