Bitcoin Price Forecast: BTC consolidates amid US-China trade truce extension expectations, US-EU trade deal

Bitcoin (BTC) has been trading in a range-bound market structure between $116,000 and $120,000 for nearly two weeks, signaling indecision among traders. Despite major macroeconomic developments, the US and China are likely to agree to extend the trade truce and a fresh trade agreement between the US and the European Union, failed to spark immediate momentum for the largest cryptocurrency by market capitalization. The Federal Reserve’s (Fed) upcoming interest rate decision this week is looming, and markets are bracing for potential volatility that could break BTC out of its current range.

The US and European Union deal brings some optimism to the market 

A trade deal between the European Union (EU) and the US was finally struck on Sunday, just ahead of fresh US-China tariff talks, according to the BBC report.

The report highlighted that the EU now faces a 15% US tariff, rather than 30% that had been threatened previously.

“But it is still a major climbdown as the rate is a lot higher than before Trump’s so-called Liberation Day in April and not as good as the UK’s 10% rate,” said the BBC’s report.

Meanwhile, US President Donald Trump’s personal involvement was crucial in closing the deal, similar to other recent trade agreements with Japan and the UK, as seen in the previous week. Moreover, US and Chinese officials are meeting again and an extension of the trade truce is expected, adding to the trade optimism ahead of the August 1 deadline.

These trade deals and ongoing talks have boosted investors’ confidence in riskier assets. Still, BTC has continued to consolidate in the $116,000 to $120,000 range for nearly two weeks, while other major altcoins have recovered, such as Ethereum, which has reached a new year-to-date high of $3,941 so far on Monday.

Fed interest rate could bring directional bias for BTC 

Bitcoin has continued to move within a range of $116,000 and $120,000 for the last 13 days, following a new all-time high of $123,218 reached on July 14. This price consolidation could come to an end as market participants await the Federal Reserve’s (Fed) interest rate decision due this Wednesday, which may provide a directional bias in either direction, depending on the announcement.

So far, the markets do not expect an interest rate cut from the US Federal Reserve (Fed) in July, despite US President Donald Trump’s continuous push for lower borrowing costs. Trump has been personally attacking Fed Chair Jerome Powell over his stance on holding rates and has repeatedly called for the central bank chief’s resignation.

Moreover, last week’s macroeconomic data indicated a still resilient US labor market, reinforcing the view that the Federal Reserve will hold interest rates steady at the upcoming monetary policy meeting this week. However, any signs of a dovish stance by the Fed could trigger a risk-on sentiment, which supports the price rally in cryptos such as Bitcoin. 

Bitcoin institutional demand remains strong 

Despite the largest cryptocurrency by market capitalization trading sideways, the institutional demand remained positive. According to the SoSoValue data, as shown below, US spot Bitcoin ETFs recorded a mild weekly inflow of $72.06 million last week, marking the seventh consecutive week of flows since mid-June. However, these inflow values are low compared to the inflow seen in the last few weeks. For BTC price to trade higher, the demand for this inflow should intensify.

Total Bitcoin Spot ETFs weekly chart. Source: SoSoValue

Bitcoin Price Forecast: BTC consolidates for nearly two weeks

Bitcoin price has been consolidating in the $116,000 to $120,000 range for the last 13 days, following a new all-time high of $123,218 reached on July 14. At the time of writing on Monday, it trades slightly down, trading at around $118,700.

If BTC falls below $116,000 on a daily basis, it could extend the decline to retest the 50-day Exponential Moving Average (EMA) at $112,321.

The Relative Strength Index (RSI) indicator on the daily chart reads 61, which is above its neutral level of 50 but points downward, indicating fading bullish momentum. Moreover, the Moving Average Convergence Divergence (MACD) indicator showed a bearish crossover on Wednesday, giving sell signals and indicating a potential downward trend.

BTC/USDT daily chart 

On the other hand, if BTC closes above $120,000 on a daily basis, it could extend the recovery toward the fresh all-time high at $123,218.