Bitcoin (BTC) dropped below the $65,000 support level as investors responded to a hawkish US Federal Reserve stance and renewed uncertainty in US-Iran peace talks. The leading cryptocurrency fell 2% to an intraday low of $64,512.2. The decline adds to the ongoing pressure on Bitcoin.
The latest drop follows a brief rally from support in the $62,000-$63,000 range, but as investors shifted to risk assets, the recent declines occurred after expectations for higher interest rates and geopolitical tensions
Despite occasional rallies, selling pressure remains, causing BTC to drop by 16% in the previous month, 9% in the last three months, 24% in the last six months, and around 38% in the last year.
Spot bitcoin exchange-traded funds (ETFs) have seen net withdrawals for the sixth week in a row, indicating that institutional investors are cutting their positions. Withdrawals have slowed down from the previous weeks, but fund flows remain negative.
According to SoSoValue, on June 18, Bitcoin spot ETFs recorded a total net outflow of $90.66 million. Morgan Stanley’s MSBT had the largest single-day net inflow at $10.43 million, bringing its cumulative historical net inflow to $301 million.
The Fed kept its benchmark interest rates unchanged; its updated projections showed that 9 of the 19 Federal Open Market Committee (FOMC) members now expect at least one interest rate hike before the end of 2026 as inflation remains above the central bank's 2% target.
A hawkish tone caused the US dollar to appreciate, while pushing Treasury yields up, thereby making non-yielding and speculative assets like cryptocurrencies less appealing. Historically, when monetary policy becomes tighter, liquidity in financial markets decreases, which can make crypto markets volatile.
The earlier optimism was sparked by the United States and Iran's announcement of a 60-day plan to extend the ceasefire with the aim of resuming shipping through the Strait of Hormuz. The agreement also detailed plans for normalising oil exports and reopening maritime trade.
But investor confidence took a hit when the planned peace negotiations in Switzerland were abruptly canceled. There were reports that neither the Iranian delegation nor high-ranking US officials were present at the talks.
Also Read: Bitcoin Price Drops to $63,900 as Market Turns Cautious
Why it MattersThe combination of collapsed US-Iran peace talks and a hawkish Federal Reserve has triggered a six-week institutional ETF exit, breaking the $65,000 floor and threatening a deep drop toward $58,330.
Bitcoin maintains a bearish near-term bias as it extends the downside reversal from the 20-day Simple Moving Average (SMA) around $66,500 for the fourth straight day. The former rising trend line has now turned into resistance, sitting much higher near $73,050.
The MACD histogram is contracting and the MACD line is at risk of crossing below its signal line. RSI is around 35, still in bearish territory. Rallies remain fragile. with $58,330 as the next support level if selling continues.
Bitcoin declined as investors reacted to a more hawkish US Federal Reserve outlook and fresh uncertainty over US-Iran peace negotiations. Higher interest rate expectations and geopolitical risks reduced demand for riskier assets like cryptocurrencies.
Bitcoin spot ETFs saw $90.66 million in net outflows on June 18, marking the sixth consecutive week of withdrawals. Sustained outflows indicate weakening institutional demand, which can add selling pressure on Bitcoin prices.
The immediate support for Bitcoin is around $60,000, with a stronger support zone near $58,330. On the upside, resistance is seen near the 20-day SMA at $66,500 and the former trendline around $73,050.
Higher interest rates strengthen the US dollar and increase bond yields, making safer investments more attractive than speculative assets like cryptocurrencies. This often leads to lower liquidity and increased volatility in the crypto market.
Investors should closely monitor upcoming Federal Reserve commentary, US inflation data, Bitcoin ETF fund flows and geopolitical developments in the Middle East. These factors are likely to determine whether Bitcoin stabilises above $60,000 or extends its decline further.
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