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Bitcoin and major altcoins may be approaching a bullish breakout, fueled by a recent statement from a senior Federal Reserve official that has sparked optimism among investors.

Federal Reserve’s Shift in Policy

Federal Reserve Governor Christopher Waller recently indicated that the central bank might consider lowering interest rates as early as its upcoming July meeting. He pointed to a slowing economy and suggested that the effects of tariffs on inflation would likely be minimal and short-lived. In his own words:

“I think we’ve got room to bring it down, and then we can kind of see what happens with inflation. We’ve been on pause for six months to wait and see, and so far the data has been fine.”

Waller’s comments came shortly after the Federal Reserve decided to leave its interest rates unchanged, currently ranging between 4.25% and 4.50%. Additionally, the Fed hinted at the possibility of implementing two rate cuts later this year.

Pressure from External Forces

The Federal Reserve is also under increasing pressure from external sources, including former President Donald Trump, who has called for a full percentage point cut. Trump highlighted the European Central Bank’s approach, which has reduced rates multiple times over the past year.

Potential Impact on Bitcoin and Altcoins

If the Federal Reserve proceeds with a rate cut, it could serve as a bullish catalyst for Bitcoin and other altcoins such as Ethereum, Solana, and Cardano. Historically, cryptocurrencies have performed well during periods of monetary easing, as seen during the COVID pandemic in 2020 and 2021.

Waller’s statement also coincides with growing institutional interest in Bitcoin and Ethereum, as evidenced by recent data showing increased demand from Wall Street investors. This suggests that the market is already anticipating a potential shift in Fed policy.

Spot ETF Inflows Signal Growing Interest

Spot Bitcoin ETFs recorded $389 million in inflows on a single day, bringing total inflows for the month to $2.28 billion. Over the past three months, Bitcoin ETFs have attracted over $10 billion in inflows, with cumulative figures now reaching $46.65 billion.

Similarly, spot Ethereum ETFs have seen steady interest, with nearly $1.5 billion in inflows over the past three months. Total inflows for Ethereum ETFs are approaching $3.9 billion. These substantial inflows reflect a growing appetite for cryptocurrencies among institutional investors.

Supply Dynamics and Price Outlook

The increasing demand for Bitcoin and Ethereum has also contributed to a decline in their available supply on exchanges. This reduction in supply, combined with strong inflows, could support a potential price rebound in the near term.

As the Federal Reserve’s policy decisions continue to unfold, market participants will be closely monitoring any developments that could influence the trajectory of cryptocurrencies. Investors should stay informed and consider these dynamics when evaluating potential investment opportunities in the digital asset space.

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