Summary

  • On Thursday morning, Bitcoin was trading around $64,100, experiencing a decline of approximately 1% for the day but having increased nearly 2% over the last week following the Federal Reserve's initial meeting with new Chair Kevin Warsh.
  • Warsh's hawkish stance, which included an increase in the Fed's year-end rate forecast and revived expectations for a rate hike in July, dampened a relief rally associated with easing tensions between the U.S. and Iran.
  • Experts suggested that a strong $60,000 support level, decreasing ETF outflows, and potential catalysts like the CLARITY Act provide grounds for cautious optimism.

Bitcoin remained steady at approximately $64,100 on Thursday, down by about 1% in the last 24 hours, as market participants evaluated a hawkish introduction from new Federal Reserve Chair Kevin Warsh against early indications that the market might be finding a bottom.

The prominent cryptocurrency maintained a market capitalization of around $1.29 trillion and, despite the pullback following the Fed's meeting, was still up 2% over the past week. Other cryptocurrencies, including Ethereum and Solana, also saw slight declines, with prices near $1,740 and $72, respectively.

This downward movement continues a trend that began on Wednesday, when the Fed decided to maintain rates at 3.5%–3.75% but elevated its year-end projections, indicating an end to rate cuts and reigniting speculation about a possible increase in July. This shift diminished a relief rally that had pushed Bitcoin to peaks of $67,000 amid the easing of U.S.-Iran tensions.

Analysts indicated that the market's reaction was more influenced by the Fed's tone than its decision. Daniela Hathorn, senior market analyst at Capital.com, noted that Bitcoin's decline was less about the anticipated rate hold and more about signals emphasizing the Fed's cautious stance on inflation. "Bitcoin has benefitted in recent years from expectations of looser monetary policy, so any suggestion that rates may remain high for an extended period generally dampens sentiment," she explained, adding that this reaction indicates investors are "reassessing the likelihood and timing of future rate cuts" rather than the policy decision itself.

Stephen Wundke, strategy and revenue director at Algoz Technologies, observed that the week's brief uptick following peace-deal news faded as Warsh's somewhat hawkish remarks led traders to brace for "another rate increase left in this cycle."

Others believe Bitcoin is currently confined within a trading range. Gerry O'Shea, head of global market insights at Hashdex, anticipates that the asset will "continue to trade within the $60,000-70,000 range" in the coming weeks unless a significant catalyst arises, citing the CLARITY Act or further easing of tensions with Iran as possible triggers.

Wundke concurred, noting that alongside the potential passage of the CLARITY Act, crypto markets are awaiting indications that "inflation in the U.S. is solely due to the war and that peace will lead to a rapid decrease." He added that, "Both outcomes now appear to be further away than traders had hoped."

The selloff has been more pronounced over a longer timeframe: Bitcoin has dropped around 17% over the past 30 days, even after recovering from a low near $62,500 last week. Market sentiment reached extreme levels, with the Crypto Fear & Greed Index hitting a low of 12 last week, while U.S. spot Bitcoin ETFs have lost nearly $4.6 billion since early May, according to Farside Investors.

Some analysts see signs of a support level forming. Bitfire Research, a Hong Kong-based digital asset wealth management firm, reported that institutional traders are actively buying the dip, claiming that "a high-value entry window has reopened" with on-chain accumulation clustering around the $60,000 mark and miner breakeven costs ranging between $30,000 and $50,000.

Additionally, analysts highlighted new liquidity from SpaceX's record-breaking $75 billion IPO, which disclosed 18,712 BTC on its balance sheet, as a potential boost if that capital is funneled into crypto markets.