Bitcoin Slides Below $64K as Hawkish Fed Outlook Overshadows Iran Peace Agreement
The cryptocurrency market moved lower on Thursday, with major digital assets extending losses despite a boost in investor sentiment across traditional markets following a newly signed peace agreement between the United States and Iran.
Bitcoin slipped roughly 3% over the past 24 hours to trade near $63,900, although it remained modestly higher on a weekly basis. The broader market followed suit, with Ether falling to around $1,733, XRP declining below $1.20, and Solana retreating toward $71. Among large-cap tokens, Hyperliquid’s HYPE posted the steepest daily loss, dropping more than 7%, though it still held significant gains over the past seven days. Tron stood out as one of the few major cryptocurrencies posting positive returns.
The market downturn came after the Federal Reserve opted to keep interest rates unchanged within the 3.5% to 3.75% range. While the decision was widely anticipated, investors focused on the central bank’s updated economic outlook, which suggested inflation risks remain elevated and future rate cuts could arrive more slowly than previously expected. Some policymakers also indicated that additional tightening cannot be ruled out if inflationary pressures persist.
The meeting marked the first policy announcement under Fed Chair Kevin Warsh, who emphasized the institution’s commitment to restoring price stability and noted that policymakers engaged in extensive debate before reaching their decision. A more restrictive monetary stance typically reduces liquidity in financial markets, creating headwinds for risk-oriented assets such as cryptocurrencies.
Meanwhile, equity markets reacted positively to geopolitical developments after President Donald Trump signed an interim agreement aimed at ending hostilities with Iran and reopening the Strait of Hormuz. The announcement lifted U.S. stock futures and weighed on oil prices, reflecting expectations of reduced geopolitical risk. However, digital assets failed to participate in the rally, highlighting the market’s greater sensitivity to monetary policy than geopolitical developments at this stage.
Market observers believe Bitcoin may remain range-bound in the near term. Gerry O’Shea, Head of Global Market Insights at Hashdex, said the asset could continue trading between $60,000 and $70,000 unless a significant catalyst emerges. Potential drivers include the enactment of the CLARITY Act, which would establish a clearer regulatory framework for the crypto industry, or further progress in easing tensions between the U.S. and Iran.
O’Shea also noted that investor attention has recently shifted toward artificial intelligence-related equities and high-profile public offerings, contributing to softer sentiment across digital asset markets. Nevertheless, he expects institutional adoption and regulatory clarity to eventually draw capital back into the sector.
Despite the latest pullback, analysts view current market behavior as a period of consolidation rather than panic selling. Bitcoin’s ability to maintain support around the low-$64,000 region suggests that downside pressure may be moderating, although uncertainty surrounding future Fed policy continues to limit bullish momentum.
Trading activity has also cooled. Combined cryptocurrency exchange volumes fell 3.45% in May to $4.41 trillion, marking the lowest monthly figure since September 2024. In contrast, real-world asset (RWA) perpetual futures continued to gain traction, with volumes climbing 10.4% during the month to reach a new record high, signaling growing interest in tokenized asset exposure even as broader market participation declines.