# Fed's new chief signals inflation is cooling — relief rally setup on bitcoin

_AI-generated trading idea · LONG · BTC, COIN, IBIT_

> Canonical page: https://commonquant.ai/research/for-you/fed-s-new-chief-signals-inflation-is-cooling-relief-rally-se--b9a80638-9f49-4891-b39c-389eb6d562d0

Bitcoin got hammered in June because investors were terrified the Fed would raise interest rates. But the new Fed chair just hinted that inflation is cooling, meaning rate hikes are less likely. This could trigger a relief rally for bitcoin.

## Idea

Throughout June, investors pulled billions out of bitcoin ETFs as fears of Fed rate hikes mounted, pushing bitcoin down to the $60K level. However, Fed Chair Warsh just made public comments signaling that inflation risks have actually come down. This directly contradicts the fear that drove the selloff. Furthermore, analysts at Bloomberg note that the market may be overpricing the likelihood of rate hikes, with JPMorgan anticipating rates being held steady. If the fundamental driver of the June crypto crash (rate hike fears) is removed by the Fed chair's new dovish tone, bitcoin is primed for a short-squeeze or relief rally back toward its pre-selloff levels.

## Key details

- Symbols: BTC, COIN, IBIT
- Timeframes: D1
- Tags: \#crypto, \#macro, \#relief\_rally, \#rate\_sensitivity

## Community

- Upvotes: 67
- Views: 1,729
- Copies: 0
- Cosigns: 0

## News sources

- [Bitcoin clings to key support level as weekly US spot ETF outflows hit $1.8B and Fed rate hike bets mount: analysts](https://www.theblock.co/post/406516/bitcoin-clings-to-key-support-level-as-weekly-us-spot-etf-outflows-hit-1-8b-and-fed-rate-hike-bets-mount-analysts) — The Block
- [Bitcoin climbs toward $60,000 after Fed Chair Warsh said inflation risks has come down](https://www.coindesk.com/markets/2026/07/01/bitcoin-retakes-usd60-000-level-after-fed-chair-warsh-said-inflation-risks-has-come-down) — CoinDesk
- [Overpricing Fed Rate Hikes Amid Potential Cuts](https://www.bloomberg.com/news/videos/2026-07-01/overpricing-fed-rate-hikes-amid-potential-cuts-video) — Bloomberg
- [Bitcoin price returns to $60K as US dollar strength rejects weekly high](https://cointelegraph.com/markets/bitcoin-price-returns-to-60k-as-us-dollar-strength-rejects-from-weekly-high) — Cointelegraph

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