Banks scrap Fed cuts as BTC climbs

TLDR

Major banks have dropped their forecasts for Federal Reserve rate cuts, while Bitcoin (BTC) is climbing above 80,000.

1. Large brokerages such as Barclays and JPMorgan now expect no Fed cuts this year and even see a chance of rate hikes as inflation and oil pressures persist.
2. Bitcoin has pushed past roughly 80,000, supported by ETF inflows, short liquidations and an inflation hedge narrative, despite a higher for longer rate backdrop.
3. The key test is whether Bitcoins strength persists if bond yields keep rising and liquidity tightens, or if it falls back in line with other risk assets.

Deep Dive

1. How Fed Views Changed

A growing group of major banks has scrapped earlier calls for multiple Fed cuts and instead expects policy to remain on hold through 2026, or even tilt toward another hike, as inflation stays sticky. A CoinDesk note reports that Barclays joined peers in abandoning rate cut forecasts, citing persistent energy driven inflation and geopolitical tensions around Iran as reasons for a higher for longer stance on rates, with swaps markets echoing that shift in pricing One bank after another scraps Fed rate-cut forecasts.

Other coverage from Bloomberg shows bond traders now pricing more than a 50 percent chance that the Fed hikes at least once before cutting, underscoring how quickly expectations flipped from two cuts to potentially none or a hike Traders ramp up bets Warshs Fed could hike rates before cutting.

2. Why Bitcoin Keeps Rising

Despite those headwinds, Bitcoin has traded above 80,000 and briefly near 81,700, its highest level since January, with market cap around 1.63 trillion dollars and a 7 percent weekly gain in one recent stretch Bitcoin bulls defend 80,500 support. That move has been powered by several overlapping forces.

First, April spot ETF inflows of about 2.44 billion dollars have seen institutions absorb several times the daily mined supply, while short sellers were squeezed, with more than 200 million dollars in short positions liquidated in 24 hours according to market reports. Second, analysts highlight that BTC is increasingly being traded as a hedge against energy driven inflation and geopolitical risk rather than purely as a rates sensitive tech proxy, which helps explain why it has held up even as bond yields climb One bank after another scraps Fed rate-cut forecasts.

3. Signals To Watch Next

If banks are right and cuts are off the table for now, the next test is whether Bitcoin can stay above key support levels, such as the 80,000 to 80,500 zone, while 10 year yields hover near the 4.5 percent area highlighted in recent macro analysis. Technical and derivatives focused commentators are watching resistance around 82,000 and the behavior of funding and futures premia to see whether this rally is spot driven or mainly a short squeeze.

On the macro side, the most important signals are upcoming inflation prints, oil prices and Fed commentary, since another leg up in yields could re tighten liquidity and put renewed pressure on speculative assets. At the same time, ETF flow data and any shift in institutional allocations will show whether Bitcoins current demand base can absorb macro volatility without a deep pullback.

Conclusion

Banks shelving Fed cut forecasts while Bitcoin climbs suggests that BTCs recent strength is being driven more by structural demand and positioning than by hopes of quick easing. If higher for longer rates persist, the balance between institutional inflows, macro shocks and key price levels around 80,000 will determine whether this is a durable regime shift or another volatile macro driven swing.