Bitcoin fell below $64,000 on Thursday as renewed hawkish signals from the Federal Reserve rattled financial markets, triggering outflows from crypto ETFs and reinforcing expectations of tighter monetary policy.
Bitcoin drops as Fed stance shifts market mood
Bitcoin slipped to around $63,900 after the Federal Reserve, under Chair Kevin Warsh, signaled a firm commitment to curbing inflation. The central bank held interest rates steady at 3.50% to 3.75% but indicated that further tightening remains likely, with about half of policymakers expecting at least one rate increase this year. Market pricing now reflects a roughly 90% chance of a hike.
The shift in tone—marked by the removal of forward guidance and fewer policy details—pushed equities and gold lower while strengthening the dollar. For crypto markets, the policy direction quickly outweighed any positive sentiment from easing geopolitical tensions.
ETF outflows highlight weakening demand
Spot Bitcoin ETFs recorded $82.2 million in net outflows on the day, with only one major fund posting a modest $14 million inflow. Ether ETFs followed with $29.4 million in net outflows, including nearly $10 million from a major Ethereum trust.
Recent flow trends suggest caution among traders. A brief inflow earlier in the week quickly reversed, and sustained buying interest has yet to return. Market participants are watching for multiple consecutive inflow sessions before signaling renewed demand.
Onchain data shows ongoing pressure
Despite recovering from recent lows, Bitcoin remains about 15% below its “true market mean” of $77,200, pointing to lingering downside pressure. Data from Glassnode shows short-term holders still underwater, with an MVRV ratio of 0.90—below the breakeven level of 1.0—and an average cost basis near $72,600.
The network’s realized capitalization has declined 1.45% over the past three months to $1.07 trillion, though the pace of outflows has slowed recently. Exchange liquidity has tilted toward buy orders near $60,000, suggesting stronger market depth at lower levels.
Macro forces outweigh geopolitical relief
Bitcoin’s recent trajectory has closely tracked broader macro conditions. The asset dropped roughly 22% between May and June amid heightened tensions tied to the U.S.-Iran conflict, as capital moved into oil and gold.
Although a ceasefire between Washington and Tehran helped ease oil prices from $86 to $76, offering some relief, the positive impact was short-lived. Analysts say the market is now more focused on whether lower energy prices will meaningfully affect inflation and future rate decisions.
Key levels and market structure in focus
Bitcoin continues to trade below its 200-week moving average of $62,358, a level historically associated with strong long-term returns when reclaimed. However, near-term risks remain.
A dense cluster of leveraged positions sits just below $64,000, making the level critical. A sustained break lower could expose downside toward the $61,500 to $62,000 range. On the upside, a recovery above $65,000 is needed to stabilize momentum, with stronger resistance between $67,000 and $68,000.
Outlook remains tied to rate expectations
Recent surveys show fund managers expect further downside before stabilization, citing weaker liquidity and capital shifting into artificial intelligence sectors. At the same time, some industry executives argue that long-term upside potential matters more than pinpointing exact price bottoms.
For now, monetary policy remains the dominant force. The Fed’s commitment to controlling inflation continues to shape market direction, limiting the impact of geopolitical developments and keeping pressure on risk-sensitive assets like Bitcoin and Ethereum.
Wondering what Fed policy means for your crypto? Explore Fed rate cuts and Bitcoin volatility to sharpen your macro trading edge.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
