The two-day meeting of the U.S. Federal Reserve’s Open Market Committee (FOMC) is set to conclude on June 17. On that day, the newly appointed Fed Chair, Kevin Warsh, will announce the central bank’s decision regarding interest rates.
According to the FedWatch Tool, the prevailing expectation among market participants is that the Fed will maintain the current interest rate between 3.50% and 3.75%. However, there may still be some short-term volatility in the price of Bitcoin (BTC) during the hours surrounding the announcement.
Recent reports indicate that optimism surrounding a potential U.S.-Iran peace deal has contributed to Bitcoin’s recent surge, propelling it to the $65,000 mark. However, this rally appears to be precarious; trading volumes have decreased, suggesting a lack of strong belief in maintaining the upward momentum.
Some experts speculate that Bitcoin may have already reached its peak following this recent positive macroeconomic sentiment. Analysts believe that the $67,300 level could represent a critical high point before any subsequent downward moves.
Interestingly, Bitcoin has not yet entered its extreme bear phase. A crypto analyst on social media platform X noted a significant increase in miner activity in June, especially after Bitcoin fell to $59,100. This decline forced many miners to cut back or diversify their operations to manage costs, given that the production cost of new Bitcoin is estimated at $76,000, significantly higher than current market prices.
The hashrate has dropped by 28% since last October, lending further credence to the idea that miners are under pressure. The months of February and June share similarities in this regard, notably in the influx of Bitcoin from miners into exchanges. Analysts indicate that this trend reflects a struggle for miners to stay afloat, compelling them to liquidate portions of their holdings to cover operational costs.
Each market cycle is considered to encompass five distinct phases, ranging from an overheated bull to an extreme bear phase. Current metrics indicate that the threshold for entering this extreme bear phase has not yet been met.
On the price front, on-chain data reveals that both miners and long-term holders are facing significant losses, indicating that capitulation among investors has not concluded. The prevailing trend appears bearish across multiple timeframes, including the weekly to the 4-hour charts.
Recent fluctuations in the Bitcoin market saw a bounce back in response to the U.S.-Iran peace negotiations, which pushed prices briefly past the 50% retracement level to $66,800. However, a subsequent rejection suggests the potential for Bitcoin to dip below the critical support level of $64,000, raising concerns that it could fall beneath $59,100.
In summary, while stock markets have been experiencing upward momentum fueled by optimistic developments, Bitcoin has struggled to break the resistance level of $70,000. Another sell-off seems increasingly likely, particularly if it drops below the $64,000 threshold, which could signal the continuation of the downtrend.
