Bitcoin (BTC) entered the final week of July with several potential volatility drivers in focus, led by the Federal Reserve’s response to US inflation, rising bond yields and the next Personal Consumption Expenditures (PCE) inflation reading.

The Federal Open Market Committee (FOMC), chaired by Kevin Warsh, is scheduled to announce its latest interest rate decision on Wednesday, July 29. Markets remain divided on the rate path, with the CME Group’s FedWatch Tool showing a 31% probability of a rate hike this week and odds of a September hike reaching as high as 50%.

June PCE inflation is due Thursday after the index reached a three-year high of 4.1% in the prior reading. At the same time, signs of weakness in the US equity uptrend have brought renewed attention to Bitcoin’s macro correlation, while whale inflows to Binance have cooled by as much as 44% since June.

Markets remain split on the Fed rate outlook

The Federal Reserve returns to the center of market attention this week as policymakers weigh persistent inflation pressure and geopolitical developments. Expectations for Fed policy have shifted after the US 2-year Treasury yield climbed to 4.3% last week, putting the possibility of additional rate hikes back in focus.

Those expectations eased slightly early Monday after oil prices fell 8% as the US and Iran paused strikes. The probability of a July rate hike moved from 37.4% to 33.7%, according to CME Group data cited in the source article. Ongoing developments in the Middle East continue to add uncertainty to the macroeconomic outlook, even after producer price index inflation data released earlier in the month came in below expectations.

Trading resource Mosaic Asset Company also pointed to a possible upward breakout in 30-year bonds. Although the long end of the Treasury curve now plays a smaller role in funding the US government, higher long-term yields could add pressure on Warsh as he frames the post-FOMC press conference. For Bitcoin traders, the rate discussion matters because higher yields can raise the opportunity cost of holding non-yielding assets and can tighten overall financial conditions across risk markets.

“The 30-year Treasury yield is also testing a key breakout level once again. In May, the 30-year yield saw a false break above the 5% level which has served as resistance since late 2023,” Mosaic wrote in the latest edition of its regular newsletter, The Market Mosaic.

Even before the latest market turbulence, Warsh had avoided dovish language on the economy and kept his post-FOMC statement and press conference notably brief.

“Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy,” he said at the time.

PCE inflation expected to ease from a three-year high

Beyond the FOMC decision, markets will monitor Thursday’s PCE index release for further indications of how the US-Iran war may be affecting inflation trends. The June print is currently at three-year highs, according to the source article.

PCE is closely watched because it is the Fed’s preferred inflation gauge, making surprises in the data relevant to rate expectations. PCE volatility can quickly affect risk assets as traders reprice expectations for the Fed’s policy response. The prior PCE release coincided with Bitcoin falling to macro lows near $58,000.

In its latest analysis, the International Monetary Economics Network (IMEN) said it expected PCE to come in moderately below May’s 4.1% year-over-year reading.

“U.S. inflation: We currently expect June PCE inflation to be 3.7% year‑over‑year,” IMEN wrote on X, according to the source article. The X post cited by the original report is available at https://x.com/int_mon_econ/status/2081501959035428865.

Bitcoin’s correlation with equities remains weak

On higher time frames, correlations between Bitcoin and major US equity indices have largely faded. TradingView data cited in the report showed the daily correlation between BTC/USD and the S&P 500, using a 20-week lookback window, as practically absent and at its lowest level since March.

Against the tech-heavy Nasdaq Composite Index, Bitcoin’s current correlation coefficient of 0.11 was last seen in mid-February. While weekly correlations tend to shift slowly, bearish geopolitical and macroeconomic events could still cause the two asset classes to move more closely together again. A low correlation reading indicates that Bitcoin and equities have not been moving in lockstep over the measured window, but it does not prevent correlations from changing quickly during market stress.

For now, US corporate earnings have continued to exceed expectations. However, the report noted that historically high valuations may not protect equities from possible pullbacks. Several major US technology stocks posted significant drawdowns last week, with the Magnificent 7 falling an aggregate 5.3% through Friday after $GOOGL and $TSLA had already sold off earlier in the week.

“Alphabet, $GOOGL, is the single largest margin contributor after significantly beating earnings estimates,” the Kobeissi Letter commented over the weekend.

“Meanwhile, 86% of reporting S&P 500 firms have so far beaten EPS estimates, while 80% have exceeded revenue expectations. AI is driving historic earnings growth.” The X post cited by the original report is available at https://x.com/KobeissiLetter/status/2081451485393461621.

Mosaic Asset Company also highlighted risks that the interest-rate environment could pose to US equities.

“Rising rates across the yield curve could keep pressuring stock prices, where indexes like the S&P 500 and Nasdaq peaked in early June and are now losing key support levels. At the same time, market breadth is deteriorating while the backdrop for seasonality is transitioning from a bullish tailwind to bearish headwind. Seasonality during mid-term election years also tends to produce lower average returns and larger drawdowns.”

Mosaic warned that, amid these emerging hurdles, the S&P 500 could lose its bullish setup altogether.

“The S&P already lost one key support level with the 50-day moving average (MA - black line). If trendline support in the triangle gives way, that could set up a test of the 200-day MA (green line) that’s currently near the 7,000 level (or 5% downside from current levels),” it added alongside an explanatory chart.

On shorter time frames, the picture remained fluid. A pause in hostilities between the US and Iran provided a bullish impulse across risk assets, while US WTI crude oil fell as low as $83 per barrel at the start of the week after previously approaching $95.

“The market is beginning to price-in a peace deal again,” Kobeissi wrote. The X post cited by the original report is available at https://x.com/KobeissiLetter/status/2081500688928977005.

Bitcoin tests its 50-month trend line inside a familiar range

Bitcoin reached new local highs after Sunday’s weekly close, rising to $65,680 on Bitstamp. BTC/USD remained within a familiar range while testing its 50-month exponential moving average (EMA), after previously turning that level into resistance in a move compared with the 2022 bear market.

Trader and analyst Rekt Capital pointed to renewed sell-side pressure in comments on the current setup.

“The more seller-dominant the volume becomes while Bitcoin is at resistance, the greater the chances for a rejection from here,” he warned followers on X on Sunday. The X post cited by the original report is available at https://x.com/rektcapital/status/2081001740942361075.

Rekt Capital also referenced the 200-week simple moving average (SMA), describing Bitcoin’s price as “sandwiched” between that level and its 50-month counterpart. Long-duration moving averages are widely followed by traders because they can act as reference points for trend structure, support and resistance, though they do not determine outcomes on their own.

“Continued price compression here is unsustainable and will eventually force major volatility,” he wrote.

“And if the seller volume keeps coming in at this rate, then there’ll likely be a breakout on seller volume to precede a rejection from this local resistance area.” The X post cited by the original report is available at https://x.com/rektcapital/status/2081380801581621752.

Binance whale inflows have nearly halved since mid-June

Onchain analytics platform CryptoQuant said the FOMC meeting could have a knock-on effect on sell-side pressure at major exchanges.

According to CryptoQuant data, BTC inflows from whales to Binance have fallen by as much as 44% since June 12, while retail inflows declined 22%. Exchange inflows are often monitored because coins moved to trading venues can increase potential sell-side liquidity, although deposits do not necessarily mean immediate selling.

“This leaves retail inflows at roughly twice the level of whale inflows, with a gap of $3.9 billion,” contributor Amr Taha wrote in a Monday blog post on CryptoQuant.

“The divergence suggests that the composition of BTC transfers into Binance has shifted: retail participants are currently significantly more active than whales in sending BTC to the exchange.”

Taha described the FOMC meeting as a “major macro catalyst” that could reshape how all investor cohorts approach the market.

“With retail inflows now running at 2x whale inflows, Wednesday’s Fed decision could provide an important test of whether the current divergence between the two BTC cohorts persists or begins to converge,” he concluded.

The CryptoQuant post cited by the original report is available at

As Cointelegraph previously reported, Binance saw single-day withdrawals of more than 9,000 BTC last week.