Cryptocurrency markets are in a wait-and-see mode as traders brace for a busy week featuring the US Federal Reserve's interest rate decision on July 29 and the release of the Personal Consumption Expenditures Price Index for June on July 30. The Fed's decision, along with inflation data, could determine the near-term direction for Bitcoin and other digital assets.
The US Federal Reserve is set to announce its interest rate decision on July 29, with the federal funds target range currently at 3.50% to 3.75%. According to the CME FedWatch Tool, there is a 66.3% probability that rates remain unchanged and a 33.7% chance of a 25-basis-point increase.
The Bureau of Economic Analysis will release the June PCE data on July 30. In May, US headline inflation rose to 4.1% from 3.8%, while core inflation increased to 3.4%. The Cleveland Fed's nowcast projects that headline inflation will ease to around 3.65% in June, with core inflation declining to 3.33%.
A US interest rate hike would be a clear headwind for Bitcoin and the broader crypto market, as lending becomes more expensive and traders tend to avoid risky assets like cryptocurrencies during periods of high inflation and surging rates. Only a stable market with low inflation can make crypto trading palatable, according to analysts.
Regulatory Developments: CLARITY Act and Senate Vote
The US Senate may begin a final attempt to advance the CLARITY Act, the most comprehensive legislation to regulate digital assets in the US, before the summer recess on August 10. The bill requires 60 votes to pass. Senate Majority Leader John Thune said that time constraints made it unlikely that the CLARITY Act would pass before the recess, but he intends to move the process forward to gauge support. July 30 is the deadline for beginning floor proceedings. Galaxy Research puts the probability of the CLARITY Act passing in 2026 at just 30%.
Blockchain Upgrades and Quantum Security
Several blockchain upgrades are scheduled this week. Zcash is set to activate its Ironwood upgrade on July 28 at around 12:00 p.m. UTC at block 3,428,143. Polygon's Ithaca hard fork will take place on July 29 at Heimdall block 50,185,000. At Sui, a working group will vote on July 27 on the final cryptographic protocols for Quantum Secure Addresses and Programmable Quantum Vaults. Mysten Labs developer Kostas Chalkias said: 'We can't afford to wait.' He plans to publish a detailed roadmap and implementation plans later this week. The Quantum Secure Addresses and Programmable Quantum Vaults standards are expected to be introduced later in 2026.
Market Conditions: Low Volume and Liquidations
Bitcoin has lacked a strong directional move over the past few days, with many traders staying on the sidelines. Trading volume in Bitcoin has declined, indicating a waiting phase. Bitcoin spot-market volume is at its lowest levels since July 2023, and average daily spot volume in July came in at just $2.2 billion. CME open interest remains near multi-year lows, while perpetual futures open interest has stalled around 300,000 BTC.
In a 24-hour period, approximately $286 million in positions were liquidated across 87,294 traders. Longs accounted for $186 million of liquidations, shorts for $100 million. Bitcoin positions cleared totaled $57 million, with $28 million in longs and $29 million in shorts. Bitcoin price swung between $63,247 and $64,660, closing flat at roughly $63,900. Ether recorded the largest total liquidations at about $58 million, with prices ranging between $1,920 and $1,850. The single biggest liquidation was a $2.9 million Bitcoin position on Binance.
General selling pressure has been ongoing since early June, and geopolitical uncertainties, including renewed nerves over escalation in the US-Iran war and an Asia chip-stock sell-off, have added headwinds for Bitcoin. Retail investor interest in Bitcoin and broader crypto has been in decline since the October 2025 all-time highs, with AI stocks becoming a major destination for the investor pivot. Bitcoin previously retreated from the 73,000 USD level.
Trading Scenarios and Volatility
Bitcoin price action is bounded by its 50-day simple moving average and exponential moving average, with the range beginning in mid-July. Liquidation clusters are at $63,500 and $64,900, according to CoinGlass. Bitcoin faces resistance at the 66,000 USD level, while Ethereum faces resistance at the 2,000 USD level. A breakout above $64,647 could serve as a long entry trigger, while a breakdown below $63,644 could serve as a short entry trigger. If the Fed cuts rates, the probability of a bullish breakout increases; if the outcome is less favorable, a bearish scenario could activate. The first few minutes after the interest rate decision are often extremely volatile, and TradeCityPro recommends avoiding trades during the announcement.
Bitcoin price rose from approximately $62,900 to over $64,100, and Ethereum rose from $1,869 to $1,910, following a period of low volatility. The total cryptocurrency market cap is 2.26 trillion USD.