Bitcoin's Bullish Outlook Faces Mixed Signals Amid Fed Rate Cut Speculations and Broader Industry Challenges

Bitcoin's market dynamics are currently shaped by a mix of macroeconomic factors, technical indicators, and broader industry developments. While expectations of Federal Reserve rate cuts could provide a bullish catalyst, recent market data and external controversies involving high-profile figures like Elon Musk and Donald Trump are adding layers of uncertainty. Investors are left navigating a complex landscape as they assess Bitcoin's short- and long-term prospects.

Fed Rate Cut Expectations Could Boost Bitcoin

The Federal Reserve's potential rate cuts have drawn attention from Bitcoin investors, as lower interest rates often increase market liquidity and enhance Bitcoin's appeal as an alternative asset.

Analysts at Bitfinex suggest Bitcoin, currently around $105,000, could rise to $120,000–$125,000 in June if a weak U.S. jobs report strengthens expectations for earlier Fed rate cuts. However, stronger labor data could push Bitcoin down to $95,000.

The upcoming U.S. jobs report is expected to show a slowdown, with forecasts of 125,000–130,000 new jobs, down from April's 177,000. Analysts believe weaker data may accelerate Fed rate cuts, boosting Bitcoin, while stronger data could delay cuts and test support levels near $102,000.

Bitcoin's 50-Day Moving Average Hits Record High

Bitcoin's 50-day simple moving average (SMA) recently reached an all-time high, surpassing $100,000 for the first time. This technical milestone underscores the cryptocurrency's strong market sentiment and follows Bitcoin's spot price peak of over $111,000 on May 22, 2025.

Yet, the narrowing gap between Bitcoin's spot price and its 50-day SMA suggests a weakening bullish momentum. Historical precedents indicate that such patterns often precede significant price pullbacks, as seen earlier this year when Bitcoin retraced to $75,000. Analysts caution that the current trend could signal a similar risk.

External Factors Weigh on Market Sentiment

Adding to the uncertainty are external events involving high-profile figures like Elon Musk and Donald Trump. Their public fallout has sent shockwaves through both the tech and crypto sectors.

Tesla (TSLA) suffered its worst single-day drop in history, plunging over 14% and wiping out $152.4 billion in market value. The crypto market followed suit—Bitcoin fell 4% to $100,500, teetering on the edge of the symbolic $100,000 level, while the CoinDesk 20 index slid nearly 5%, led by steep losses in Solana and Sui. Crypto-related stocks, including Coinbase and major mining firms, also ended the day deep in the red.

While the White House has reportedly stepped in to mediate between Trump and Musk, the outcome remains uncertain.

Leveraged Long Positions on Bitfinex at Lowest Since December

Further complicating Bitcoin's outlook is the declining number of leveraged long positions on the Bitfinex exchange. These positions have dropped to their lowest level since December 2024, reflecting cautious sentiment among traders. The chart highlights the contrarian nature of Bitfinex BTCUSD longs—rather than signaling weakness, such declines have often preceded upward price movements.

“As long as Bitfinex long positions keep dropping, Bitcoin will continue to rise,” noted Joao Wedson, CEO of Alphractal, suggesting that reduced leverage may be a bullish indicator in disguise. While this remains speculative and hinges on broader market conditions, historical patterns point to the potential for a rally when sentiment hits such lows.