Fed's new chief signals inflation is cooling — relief rally setup on bitcoin
Thesis
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.
Strategy approach
Build a rule-based strategy that enters long BTC-USD on D1 when the price closes above $61,500 (breaking above recent resistance) after a daily RSI(14) reading below 45. Exit if price closes below $57,500 (support breakdown). Include a 14-day max hold.