Bitcoin Edges Lower as Fed Signals Higher Rates Amid Inflation Concerns

Bitcoin traded near $64,100 Thursday morning, down about 1% on the day but up roughly 2% over the past week, after the Federal Reserve's first meeting under new Chair Kevin Warsh.

Warsh's hawkish signals, which included lifting the Fed's year-end rate projection and reviving July hike bets, cooled a relief rally tied to a U.S.-Iran de-escalation.

Analysts argued that a firming $60,000 support level, slowing ETF outflows, and catalysts like the CLARITY Act give reason for cautious optimism.

Bitcoin steadied near $64,100 on Thursday, down about 1% over the past 24 hours, as traders weighed a hawkish debut from new Federal Reserve Chair Kevin Warsh against early signs the market may be carving out a bottom.

The leading cryptocurrency held a market cap near $1.29 trillion and—despite the post-Fed pullback—remained up 2% over the past week. Ethereum and Solana also eased, trading near $1,740 and $72, respectively.

The drift lower extends a pullback that set in Wednesday, when the Fed held rates at 3.5%–3.75% but raised its year-end projection—signaling it is done cutting and reviving bets on a possible July hike. The pivot cooled a relief rally that had carried Bitcoin to highs of $67,000 on de-escalation of the U.S.-Iran conflict.

The selling owes more to the Fed's tone than its decision, analysts told Decrypt. Daniela Hathorn, senior market analyst at Capital.com, said Bitcoin slipped less on the priced-in rate hold than on messaging that reinforced the Fed's caution about declaring victory over inflation. "Bitcoin has benefited in recent years from expectations of easier monetary policy, so any indication that rates could stay elevated for longer tends to weigh on sentiment," she said, adding that the reaction suggests 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, said the week's brief rebound on peace-deal news faded once Warsh's near-hawkish tone left traders bracing for "another rate rise left in this cycle."

Others see Bitcoin boxed into a range. Gerry O'Shea, head of global market insights at Hashdex, expects the asset to "continue to trade in the $60,000-70,000 range" in the weeks ahead absent a major catalyst—naming the CLARITY Act or further Iran de-escalation as potential triggers.

Wundke agreed, noting that along with the CLARITY Act’s potential passage, crypto markets are waiting on signals that “inflation in the U.S. is all due to the war and that peace will see it retract quickly.” He added that, “Both outcomes now look a little more further down the line than traders had hoped.”

The selloff is sharper over a longer horizon: Bitcoin is down roughly 17% over the past 30 days, even after bouncing off a low near $62,500 last week. Sentiment hit extreme levels, with the Crypto Fear & Greed Index bottoming at 12 last week, while U.S. spot Bitcoin ETFs have shed just under $4.6 billion since the start of May, per Farside Investors.

Some read a floor forming. Hong Kong-based digital asset wealth management group Bitfire Research said institutional desks are aggressively buying the dip, arguing that "a high-value entry window has reopened" with on-chain accumulation clustering near $60,000 and miner breakeven costs between $30,000 and $50,000.

Analysts also flagged fresh liquidity from SpaceX's record $75 billion IPO, which disclosed 18,712 BTC on its balance sheet, as a potential tailwind should that capital rotate into crypto.

For now, though, the market hangs on inflation. Traders are pricing roughly a 30% chance of a rate hike at the Fed's July meeting, per CME FedWatch—up from about 8% a week ago and 7% a month ago, with a cut now off the table. With U.S. prices near a three-year high, Bitcoin's next leg likely hinges on whether the macro backdrop behind the sell-off actually eases.