Bitcoin traders brace for Fed's rate call and inflation this week

Bitcoin traders brace for Fed's rate call and inflation this week · TheStreet

Marcel Knobloch

Mon, July 27, 2026 at 8:45 PM GMT+3 4 min read

An eventful week lies ahead for Bitcoin (BTC) and the broader crypto market.

Alongside the Federal Reserve's interest rate decision and U.S. inflation data, investors are also watching the U.S.-Iran war, a possible final push for the CLARITY Act, and upcoming upgrades to Zcash and Polygon.

Iran War remains biggest source of uncertainty

The United States and Iran have temporarily suspended their attacks on each other and the prospect of diplomatic talks pushed Brent crude oil price down by around 5% to $92 a barrel on July 27, after it had briefly climbed above $100 last week.

However, a lasting de-escalation is far from certain. The Strait of Hormuz remains closed, while the Houthi militia continues to attack targets linked to Saudi Arabia's oil industry.

A renewed escalation would drive oil prices higher again, pushing up inflation expectations in the process.

For Bitcoin and the broader crypto market, this remains a major source of concern that is likely to keep both retail and institutional investors on the edge.

A sustained surge in oil price could lead to inflation, making risk assets like cryptocurrencies less popular among traders.

Trending on TheStreet Roundtable:

Fed to decide on interest rates

The U.S. Federal Reserve will announce its interest rate decision on July 29. The federal funds target range currently stands at 3.50% to 3.75%.

According to the CME FedWatch Tool, markets are pricing in a 66.3% probability that rates will remain unchanged and a 33.7% chance of a 25-basis-point increase.

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

A hike in interest rates would be a clear headwind for Bitcoin and the broader crypto market as lending would become more expensive.

Inflation data

On July 30, the Bureau of Economic Analysis will release the Personal Consumption Expenditures Price Index data for June. In May, headline inflation rose from 3.8% to 4.1%, while core inflation increased to 3.4%.

The Cleveland Fed's nowcast projects that headline inflation will ease to around 3.65% in June, while core inflation is expected to decline to 3.33%.

A higher-than-expected figure could increase the likelihood of further rate hikes and place additional pressure on the crypto market.

Traders tend to avoid risky assets like cryptocurrencies during periods of high inflation and surging rates. Only a stable market with low inflation can make crypto trading palatable.

CLARITY Act still facing loggerheads

The U.S. Senate may begin a final attempt to advance the CLARITY Act before the summer recess. No date has yet been set for a vote, although one is expected this week. The bill requires 60 votes to pass.

Senate Majority Leader John Thune tempered expectations last week, saying that time constraints made it unlikely that the CLARITY Act would pass before the summer recess. However, he still intends to move the process forward to gauge how much support can be secured.

Galaxy Research now puts the probability of the CLARITY Act being passed in 2026 at just 30%.

July 30 is considered the deadline for beginning floor proceedings, as the Senate is scheduled to enter recess on Aug. 10.

The CLARITY Act is so far the most comprehensive legislation to regulate digital assets in the U.S.

Zcash and Polygon activate upgrades, Sui's quantum plan

Zcash is set to activate its Ironwood upgrade on July 28 at around 12:00 p.m. UTC at block 3,428,143. The new shielded pool is intended to allow users to independently verify the integrity of the circulating ZEC supply once again.

Polygon's Ithaca hard fork will take place on July 29 at Heimdall block 50,185,000. The upgrade introduces automatic recovery mechanisms for failed block producers, along with additional safeguards against destabilizing transactions.

At Sui, a working group will vote on July 27 on the final cryptographic protocols for Quantum Secure Addresses and Programmable Quantum Vaults. Both standards are expected to be introduced later in 2026.

Mysten Labs developer Kostas Chalkias explained,

"We can't afford to wait. A dedicated working group votes on Monday to finalise the cryptographic protocols. This decision wasn't made overnight."

Chalkias said he plans to publish a detailed roadmap and concrete implementation plans later this week.

This story was originally published by TheStreet on Jul 27, 2026, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.