Bitcoin Stuck Below $106,000 Amid Geopolitical Headwinds and Fed Caution

Key Points:

• Bitcoin (BTC) is consolidating near the $106,000 level, with the path to the $112,000 ATH blocked by persistent overhead resistance.

• Geopolitical uncertainty (Middle East conflict) and the Fed’s unchanged interest rates are key factors casting a pall over Bitcoin bulls.

Bitcoin Consolidation Near Historic Resistance

Bitcoin appears to be entering a consolidation phase, trading within a roughly $10,000 range over the past five weeks. Prices have proven unable to breach the significant overhead resistance concentration near the $106,000 level, hindering a push towards the previous all-time high of approximately $112,000.

Geopolitical Tensions Cool Risk Appetite

Escalating geopolitical instability in the Middle East, notably the recent flare-up between Israel and Iran, has fostered a climate of risk aversion among investors. Safe-haven assets such as gold and US Treasurys have attracted capital inflows, with gold recently approaching its own all-time highs.

Conversely, risk-on assets like Bitcoin have seen reduced demand. Following Israel’s airstrike on Iran, Bitcoin’s price fell sharply by approximately 3.6%. The subsequent hacking of the Iranian cryptocurrency exchange Nobitex for an estimated $81 million by a pro-Israel group further deepened bearish sentiment, highlighting crypto’s potential vulnerability within the current geopolitical cyber conflict landscape.

Despite Bitcoin’s moniker as “digital gold,” its historical correlation with traditional risk assets like stocks often results in diminished performance during periods of geopolitical crisis. This macroeconomic environment continues to mute the bullish signal for a BTC rally beyond current consolidation levels.

Fed’s Hawkish Stance Limits Monetary Easing Expectations

The June 18th decision by the Federal Open Market Committee (FOMC) to maintain the target range for the federal funds rate at 4.25% to 4.50% has chilled Bitcoin’s upward momentum. The Federal Reserve’s caution, fueled by persistent inflation (core PCE inflation remains at 2.8%) and concerns over potential persistent price pressures stemming from policies associated with President Donald Trump, has steered expectations away from aggressive near-term rate cuts.

🇺🇸 UPDATE: Fed Chair Powell says inflation effects may take time to assess and expects a meaningful rise in coming months. pic.twitter.com/QoEpTQB1sD

— Cointelegraph (@Cointelegraph) June 18, 2025

The updated FOMC “dot plot” forecasts only two 25-basis-point rate cuts for the remainder of 2025, significantly down from the previously anticipated four cuts. Market expectations, as indicated by the CME Group’s FedWatch Tool, now project just a 58.4% chance of a cut occurring at the next policy meeting in September.

This restrictive monetary policy stance strengthens the US dollar, which typically acts negatively on risk-sensitive assets like Bitcoin. Combined with ongoing geopolitical gloom, the situation represents an “extraordinary inflation fight,” according to market commentators.

“Our base case is that the Fed may adopt a more cautious tone in its September meeting, potentially indicating a single rate cut for 2025, diverging from market pricing,” stated QCP Capital, a Singapore-based crypto trading firm, on June 18th. “Such a revision would likely pressure risk assets, including Bitcoin and broader digital assets, as liquidity expectations are pared back.”

Technical Picture Resists Breakout

Technically, Bitcoin is trading below critical multi-timeframe moving averages ($106,000, $106,040, $106,400), reinforcing price consolidation. On the four-hour chart, price action has compressed between the $103,600 and $105,500 range for several weeks, with the moving averages consistently offering resistance at the $106,000 level.

Cointelegraph analysis notes that a decisive move above these key levels could signal renewed bullishness and empower BTC to challenge the $112,000 resistance. Currently, the relative strength index (RSI) is hovering around the neutral midpoint of 46, suggesting a lack of strong directional conviction.

Furthermore, low trading volume on platforms like Binance and an imminent bearish crossover between shorter-term (50-day) and longer-term (100-day) simple moving averages on the four-hour chart signal waning upward momentum.

This consolidation pattern, supported by the prevailing macroeconomic and geopolitical conditions, seems poised to stifle the necessary momentum for a sustained price appreciation challenge to the all-time high. However, persistent conditions in the derivatives market could potentially fuel a short squeeze if the near-term trading landscape shifts favorably.

Disclaimer: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.