Crypto Market Cautious Ahead of Fed
Bitcoin weakened during the European session on Wednesday (June 17th), with the crypto market moving cautiously ahead of the first Federal Reserve policy decision under Chairman Kevin Warsh. BTC prices were seen around $64,933, after moving in a daily range of $64,830 to $66,803.
This movement indicates that the previous recovery rally is starting to lose steam, although global risk sentiment has improved following developments in the interim US-Iran peace deal. Reuters reported that Bitcoin is still moving above the $65,400 area, while global markets await the Fed's direction and response to the decline in oil prices.
The main factor for Bitcoin right now is US interest rate expectations. The Fed is expected to keep rates unchanged, but investors will be watching to see if Warsh signals a more hawkish stance, especially as inflation remains a concern. Expectations for a December rate hike are said to have dropped to 59% after the US-Iran deal pushed down oil prices and eased some inflation concerns.
The decline in oil prices is a key fundamental factor for risk assets. Brent fell below $80 per barrel after the market assessed that the US-Iran deal could pave the way for additional Iranian supply and the reopening of the Strait of Hormuz. If energy pressures continue to ease, inflation expectations could also ease, potentially limiting pressure on yields and the US dollar.
However, the impact on Bitcoin has not been entirely positive. As a risky asset and highly sensitive to liquidity, Bitcoin remains vulnerable if the Fed maintains a tighter tone or closes off room for policy easing. High or persistently high interest rates can reduce interest in speculative assets, as investors tend to choose instruments with clearer returns.
Ethereum also weakened during the same session, trading around $1,766.72, with a daily range of $1,761.28 to $1,832.65. The depressed movement of ETH suggests that the broader crypto market is still holding its ground ahead of the Fed's decision, rather than simply moving based on Bitcoin-specific sentiment.
The market's next focus will be on the Fed statement, the latest economic projections, the direction of Treasury yields, the movement of the US dollar, and developments regarding the US-Iran Hormuz agreement. As long as policy signals remain unclear, Bitcoin has the potential to remain within a limited range, prone to sensitivity to changes in interest rate expectations and global liquidity. (arl)
Source: Newsmaker.id
