Bitcoin Slides Below $118K Amid Fed Uncertainty and Tariff Fears

Bitcoin experienced a minor retreat on Wednesday, falling 0.8% to $117,911.3, as market participants braced for the U.S. Federal Reserve’s latest interest rate decision and the looming August 1 deadline for new tariffs introduced by President Donald Trump.

The price drop came after Bitcoin had hovered near record highs, briefly crossing $123,000 in mid-July, sparking speculation about the next major price move.

Despite continued optimism surrounding the long-term trajectory of Bitcoin, including predictions it could eventually reach $1 million per coin, short-term sentiment has weakened. The market is currently gripped by uncertainty, with both macroeconomic pressures and institutional repositioning weighing on prices.

Fed Decision Looms as Strategy Buys Big

The current pullback coincides with caution ahead of the Federal Reserve’s July meeting, where most analysts expect interest rates to remain unchanged.

The CME FedWatch tool places a 98% probability that the Fed will maintain its rate at 4.25%–4.5%, though mounting political pressure, particularly from Trump and his allies, has stirred expectations of future cuts.

Bitcoin’s recent surge in price drew attention from corporate entities, most notably Strategy (formerly MicroStrategy), which announced a historic $2.5 billion perpetual preferred stock IPO to fund the purchase of 21,021 more Bitcoin.

Acquired at an average price of $117,256 per coin, the purchase brings Strategy’s total holdings to 628,791 BTC, worth approximately $46.8 billion.

Yet, even this substantial vote of confidence wasn’t enough to halt market consolidation. According to on-chain metrics, long-term holders have started distributing holdings as Bitcoin approaches the psychological $120K resistance.

Notably, Galaxy Digital added to institutional selling pressure by reportedly unloading 80,000 BTC, reflecting profit-taking across key players.

Broader Crypto Market Retreats, Consolidation Signals Build

Bitcoin’s modest slide was mirrored across the wider cryptocurrency landscape. Ethereum stabilized at $3,807.44, while XRP dipped 0.6% to $3.1290. Solana, Cardano, and Dogecoin dropped 2.1%, 1.6%, and 2.2% respectively. Meanwhile, the politically-linked $TRUMP token fell 2.6%, highlighting the market’s fragile sentiment.

Technical indicators suggest Bitcoin is entering a consolidation phase. Bollinger Bands have tightened significantly, and the Relative Strength Index (RSI) has cooled to 59—off overbought levels, but not yet indicating weakness.

Open interest in Bitcoin futures dropped from $50.58 billion to $49.58 billion, with $173.8 million in long liquidations in just 12 hours, according to Coinglass.

This compression in volatility, alongside a narrowing high-low daily range, typically precedes a sharp directional move. Analysts are divided on whether Bitcoin will break higher or test support levels between $114,000 and $110,000 in the short term.

Adding to the suspense, the White House is expected to release a crypto policy report, possibly revealing the total number of Bitcoin held in the proposed Strategic Bitcoin Reserve. This could serve as a key catalyst if the report signals stronger governmental endorsement of the asset class.

Can Bitcoin Still Hit $1 Million?

While Bitcoin’s near-term outlook is uncertain, its long-term potential remains a hot topic. With limited supply, surging institutional interest, expanding ETF inflows, and growing adoption, some analysts believe Bitcoin could eventually reach $1 million per coin.

Cathie Wood, Michael Saylor, and Robert Kiyosaki are among the high-profile proponents predicting such astronomical valuations, especially if Wall Street allocates a portion of its reserves to Bitcoin and global adoption reaches 20–40% of the population.

But risks remain. A significant quantum computing breakthrough could jeopardize Bitcoin’s security model. An estimated 4 million BTC are currently vulnerable to quantum attacks, prompting a global effort to develop post-quantum cryptographic defenses.

For now, Bitcoin remains caught between bullish long-term fundamentals and cautious short-term market dynamics. Traders await clarity from the Fed and the White House as BTC hovers just below key resistance, quietly building momentum for its next big move.