Federal Reserve Minutes Spark Market Volatility Bitcoin Drops 1.5%

The latest Federal Reserve minutes for May revealed that officials are increasingly concerned about the "twin risks" of high inflation and high unemployment, indicating a growing uncertainty in the economic outlook. The minutes highlighted that inflation may persist longer than anticipated, and the impact of tariffs and trade policies on the economy is more significant than previously expected. This has led to a downgrade in GDP and employment prospects. Some officials also expressed concerns about the potential impact on the U.S. dollar's safe-haven status.

According to the market expectations, there could be 1-3 interest rate cuts this year. The cryptocurrency market has responded to these developments with synchronous fluctuations. Bitcoin (BTC) experienced a dip to $106,000 before rebounding, reflecting the short-term pressure on market confidence.

Bitunix analysts have interpreted the Federal Reserve minutes as sending a "hawkish with a dovish tone" signal, indicating that the policy direction remains uncertain. This uncertainty is expected to intensify short-term market fluctuations. As a high-volatility asset, BTC is particularly vulnerable during such times. Technically, analysts advise paying attention to the support zone from $107,700 to $106,500. If this zone is broken, BTC may test the $105,000 level. The overhead resistance is identified from $110,800 to $112,000, and it is recommended to wait and see before a breakthrough occurs.

On a macro level, Bitunix analysts suggest focusing on changes in inflation and unemployment rates. They recommend managing risks, adjusting asset allocations, and preparing for potential future fluctuations. This approach aims to navigate the current economic uncertainties and mitigate the impact on investment portfolios.