Bitcoin Price Faces New Test as Fed Hike Odds Jump to 36%, Grayscale Says

• Bitcoin price recovered above $65,000 as Grayscale’s Zach Pandl said the market may have already reached its bottom if the Federal Reserve pauses rate hikes
• Markets raised the probability of a July 29 Fed rate hike to 36%, according to Bloomberg WIRP data shared by Jim Bianco, adding uncertainty to Bitcoin’s near-term outlook
• Grayscale argues macroeconomic conditions now matter more than Bitcoin’s traditional four-year cycle, citing stronger institutional participation in the market

Bitcoin’s price has bounced back above $65,000 after slipping below $60,000 earlier this month. This gave traders a reason to believe the worst of the selloff may be over. Grayscale is one of them. The asset manager says Bitcoin could have already found its low, but that view is moving into a fresh obstacle. Just days before the Federal Reserve’s next meeting, markets sharply increased the odds of another rate hike. This further put the latest recovery under pressure.

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Why Grayscale Thinks Bitcoin Price Bottom May Already Be In

Grayscale’s Head of Research, Zach Pandl, believes Bitcoin has become far more sensitive to macroeconomic conditions than it was in previous cycles. Rather than focusing on the familiar four-year halving pattern, he argues that interest rates, economic growth, and liquidity now carry more weight in deciding where the market goes next.

This marks a shift from the traditional cycle model, which suggests Bitcoin typically bottoms about a year after its peak. Based on that history, another decline later this year would still be possible.

It should be noted that Pandl is not dismissing that pattern entirely. He simply believes today’s market looks different. Spot Bitcoin ETFs have brought in institutional capital at a scale the industry has never seen before, and Bitcoin is increasingly trading alongside other macro-sensitive assets.

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Fed Hike Odds Climb to 36% Ahead of the July 29 FOMC Meeting

Amidst this, Bloomberg WIRP data, shared by macro analyst Jim Bianco, shows markets are now pricing in a 36% probability of a rate hike at the Federal Reserve’s July 29 meeting. Just weeks ago, this possibility appeared far less likely.

For Bitcoin, the stakes are straightforward. Higher interest rates tend to tighten financial conditions and reduce demand for risk assets. A pause would support Grayscale’s view that the Bitcoin price may already have established a strong floor. Another hike could force investors to rethink that assumption.

Bitcoin has found some breathing room above $65,000, but traders may not have to wait long for the next major catalyst. The Federal Reserve’s July meeting is now shaping up as the event that could either double down on Grayscale’s outlook or put it under fresh pressure.

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