Bitcoin Breaks $75,000 as Morgan Stanley Sticks to Fed Rate-Cut Forecast

Bitcoin is highly sensitive to interest rates and dollar liquidity, making the Federal Reserve’s rate decisions a key driver of crypto-asset and technology-stock valuations. Markets had initially expected monetary policy to ease in 2026, but rising energy prices have deepened inflation concerns and made investors more cautious, weighing on both Bitcoin and the Nasdaq.

After the FOMC left rates unchanged at its latest 2026 meeting, Chair Jerome Powell struck a hawkish tone, while the Fed raised its inflation forecast to 2.7%, signaling that rate cuts could be delayed. Bitcoin promptly fell below $71,000 and briefly approached $70,500. About 128,000–135,000 traders were liquidated across the market, with liquidations totaling roughly $452 million–$458 million.

Bitcoin, or BTC, is highly sensitive to global liquidity and interest-rate expectations. Federal Reserve rate cuts typically reduce the cost of holding dollar-denominated assets and can increase investors’ appetite for risk assets such as cryptocurrencies. Danske Bank believes markets are underestimating the scale of this year’s shift in U.S. monetary policy, making upcoming rate signals particularly important.

On July 20, BTC broke above $78,000 and briefly surpassed $78,400, reaching its highest level in nearly 14 days. Danske Bank analysts forecast that the Fed will cut rates by a cumulative 50 basis points this year. Meanwhile, Iranian state media signaled that the United States might lift its naval blockade, fueling expectations of a ceasefire and lifting both precious metals and Bitcoin.

Crude oil prices influence inflation and U.S. Federal Reserve interest-rate decisions, as well as capital flows into risk assets such as Bitcoin. Analysts say a rapid fall in oil prices that lowers inflation expectations could prompt markets to bring forward bets on Fed rate cuts, creating the conditions for Bitcoin to test $80,000.

Crude oil recently fell below $100 a barrel following a ceasefire agreement between the United States and Iran, while Bitcoin rebounded to about $70,900. Analysts estimate that expectations of rate cuts could strengthen if oil prices continue to fall by 15% to 16%. The report, however, did not provide exact dates for the agreement's entry into force or the price observations.