Bitcoin showed slight fluctuations during Wednesday trading as risk appetite improved following a trade agreement between the United States and Japan. However, the world’s largest cryptocurrency remains locked in a narrow trading range after hitting record highs earlier this month.

As of 13:13 GMT, Bitcoin was down 0.5% at $118,582.7 on CoinMarketCap.

Despite recent gains, Bitcoin has remained in a technical consolidation zone after surging to a new all-time high above $123,000 last week. The market has since trimmed gains amid continued monitoring of global regulatory and economic developments.

US-Japan trade deal lifts global risk appetite

Overall market sentiment remained broadly positive, supported by President Donald Trump’s announcement of a wide-ranging trade agreement with Japan, which boosted risk assets worldwide.

Trump stated that Washington and Tokyo agreed to a 15% tariff on all Japanese imports—lower than the previously proposed 25%.

Under the deal, the United States also secured $550 billion in Japanese investments in the US economy. The agreement opens Japanese markets to American exports including cars, agricultural goods, and energy products, bolstering optimism over global trade and demand growth.

Risk assets rose globally, while gold prices declined, reflecting improved risk sentiment.

Still, Bitcoin continued to trade within tight ranges, as investors remained cautious awaiting further trade progress before the August 1 deadline.

Additional boost from US crypto legislation and Fed meeting in focus

The crypto market received further support from the recent passage of key regulatory legislation in the United States.

President Trump signed the GENIUS Act into law, establishing a federal regulatory framework for stablecoins. The House of Representatives also passed two other major crypto-related bills, both now heading to the Senate.

Investor attention is now focused on the upcoming Federal Reserve meeting on July 30, in search of signals on the future path of interest rates.

Is Bitcoin poised for a 20% rally?

Analysts suggest that Bitcoin may be on the verge of a strong breakout that could lead to new all-time highs. Technical indicators show that the digital asset is currently in a bullish continuation pattern known as a "bull flag," which could soon trigger a price surge.

After breaching its historical level at $122,000, the price has entered a consolidation phase near $118,000, which analysts view as temporary. Many expect a move toward $140,000.

Technical indicators support the bullish case

Bitcoin charts show several bullish patterns:

- A bull flag pattern, a classic signal of trend continuation.

- An inverted head and shoulders on the 3-hour chart, also targeting $140,000.

- The $139,000 level aligns with strong resistance on the MVRV Bollinger Band indicator.

Could Bitcoin dip to $115,000 first?

Despite optimism, some analysts warn of a potential short-term correction to $115,000 to test support levels before resuming the uptrend. They see this as a buying opportunity for investors, though the scenario is neither guaranteed nor necessary.

Overall, technical signals and analysis suggest Bitcoin is on track for a strong upward wave. With price stability above $118,000, the $140,000 target appears feasible, especially if institutional inflows and supportive US legislation continue.

Investors are advised to closely monitor support and resistance levels to capitalize on upcoming market opportunities.

Oil prices steadied during Wednesday trading after three consecutive days of losses, as a trade agreement between the United States and Japan helped improve global market sentiment on trade.

As of 09:07 GMT, Brent crude fell by 12 cents, or 0.2%, to $68.47 per barrel. US West Texas Intermediate (WTI) crude also declined by 14 cents, or 0.2%, to $65.17 per barrel.

Both benchmarks had lost about 1% during Tuesday’s session, after the European Union announced plans to consider retaliatory measures against US tariffs amid fading hopes of reaching an agreement before the August 1 deadline.

US President Donald Trump said on Tuesday that the country had reached a trade agreement with Japan that includes a 15% tariff on US imports from Japan.

“The recent price drop over the past three sessions appears to have halted, but I don’t expect a major upward push from the US-Japan deal, as delays and roadblocks in talks with the EU and China will continue to weigh on sentiment,” said Vandana Hari, founder of Vanda Insights, an energy market analysis firm.

Separately, China’s Ministry of Commerce said on Wednesday that the Chinese commerce minister and the EU trade commissioner had held frank and in-depth discussions on economic and trade cooperation, as well as other issues facing both sides, ahead of an upcoming summit.

On the inventory front, market sources citing American Petroleum Institute (API) data on Tuesday reported that US crude oil and gasoline inventories fell last week, while distillate inventories rose by 3.48 million barrels.

“This development will provide some support to the distillates market, which is increasingly facing tightness,” ING analysts said in a note, adding that the drop in crude inventories could lend some price support, even as a large surplus is expected to enter the market later this year.

In another bullish sign for the oil market, the US Energy Secretary said on Tuesday that the United States is considering imposing sanctions on Russian oil as part of its efforts to end the war in Ukraine.

Last Friday, the European Union approved its 18th sanctions package against Russia, which included lowering the price cap on Russian crude oil.

Market attention on Wednesday centered on the Japanese yen, which saw sharp fluctuations as traders assessed the impact of the newly announced US-Japan trade deal and speculated over the future of Prime Minister Shigeru Ishiba.

The yen initially surged to its strongest level since July 11 at 146.20 per dollar, supported by President Donald Trump's announcement of a trade agreement with Tokyo. However, it quickly reversed into losses following reports suggesting Ishiba planned to resign next month after his party suffered a major defeat in the upper house elections.

Ishiba denied the reports, stating that claims of his resignation were “completely baseless,” which helped the yen recoup some losses and later stabilize at 146.83 per dollar.

The trade deal—which includes tariff cuts on car imports and shields Tokyo from new harsh duties—impacts the yen in two ways: its effect on the economy and on Bank of Japan policy, which has been cautiously moving toward rate hikes.

“The trade agreement opens the door for the Bank of Japan to raise rates this year,” said Jane Foley, head of FX strategy at Rabobank. “That’s positive for the yen and makes a return to 150 per dollar more difficult.”

She added, “With trade and political uncertainty lingering, it was clear the bank would not act hastily. Of course, the uncertainty isn’t over yet, which will keep the BoJ cautious—but nobody expected swift moves anyway.”

Elsewhere, movements in other currencies were limited amid persistent uncertainty over tariffs and broader skepticism on how currencies might react even if trade clarity emerges.

The US dollar has been one of the biggest losers since Trump first announced sweeping tariffs on April 2. While the weakness continued even after a temporary suspension to allow further negotiations, the pace of decline has slowed this month.

The euro slipped 0.1% to $1.1744, still near its four-year high reached earlier this month. Meanwhile, the British pound edged up slightly to $1.1354.

In contrast to the euro’s performance, European equities climbed on hopes the Japan deal could pave the way for further trade agreements, including one with the European Union.

Trump announced that EU negotiators would arrive in Washington on Wednesday.

The European Central Bank is expected to meet on Thursday, though it is unlikely to have a major impact on the currency, as interest rates are expected to remain unchanged.

Improved sentiment toward the global economy following the trade deal, along with rising metal prices, also supported the Australian dollar, which rose 0.4% to $0.6581, despite ongoing market caution.

As of 11:57 GMT, the US dollar index rose 0.1% to 97.4 points, with a high of 97.5 and a low of 97.3 points.

Gold prices declined in European trading on Wednesday, marking their first loss in four sessions. The pullback comes after the metal hit a five-week high earlier in Asian trading, as profit-taking and improved market risk appetite weighed on the precious metal following a major trade agreement between the US and Japan.

The US dollar also began rebounding from a two-week low, as recession concerns eased ahead of further trade updates expected before the August 1 deadline.

The Price

Gold prices dropped 0.45% to $3,416.52 an ounce, down from the session’s open at $3,431.44, after reaching an earlier high of $3,438.94 — the highest since June 16.

On Tuesday, gold settled with a 1.0% gain, its third consecutive daily increase, supported by lower US yields and a weaker dollar.

US Dollar

The US Dollar Index rose about 0.2% on Wednesday, attempting to recover from a two-week low of 97.31. It’s on track for its first gain in four sessions, reflecting a broad-based rebound in the greenback.

Beyond bargain buying, the dollar’s strength was boosted by a significant US-Japan trade deal that helped ease recession fears in the world’s largest economy.

Trade Developments

President Donald Trump announced on Tuesday a “massive” trade agreement with Japan, which includes reciprocal 15% tariffs on Japanese exports to the US and a reduction in auto tariffs from 25% to 15%.

Treasury Secretary Scott Besant also stated that US and Chinese officials would meet next week in Stockholm to discuss a possible extension of the trade negotiation deadline to August 12.

US Interest Rates

Trump continued his attacks on Fed Chair Jerome Powell, calling him a “fool” for keeping interest rates “too high” and claimed Powell would step down in eight months.

According to the CME FedWatch Tool, there’s currently a 5% chance of a 25-basis-point rate cut at the July meeting, and a 95% probability of rates remaining unchanged.

For September, markets are pricing in a 59% chance of a rate cut and a 41% chance of no change.

The upcoming Fed policy meeting next week is expected to offer more clarity on the rate path for the remainder of the year.

Gold Outlook

Tim Waterer, Chief Market Analyst at KCM Trade, said more trade agreements before August 1 could boost overall risk appetite and reduce demand for gold.

He added that if the US dollar remains under pressure, gold has a realistic chance of retesting the $3,500 level in the near term.

Matt Simpson of City Index noted that current conditions suggest low liquidity, and a decline in political pressure on Powell could reduce volatility, potentially giving bears an opportunity to target moves below $3,500.

SPDR Gold Trust

Holdings in the SPDR Gold Trust — the world’s largest gold-backed ETF — rose by 7.74 metric tons yesterday, marking the biggest daily increase since April 10. Total holdings now stand at 954.80 metric tons, the highest since June 27.