Bitcoin awaits Fed decision as downside risks persist

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Mykhailo Ihnatenko

2 hours ago

Bitcoin awaits Fed decision as downside risks persist

Bitcoin's recent recovery momentum has weakened noticeably, while capital flows into spot BTC ETFs have nearly stalled and remain close to neutral.

All eyes are now on the Federal Reserve's interest rate decision. This will be the first rate announcement under the leadership of new Fed Chair Kevin Warsh, making his comments particularly important for market participants.

Markets widely expect interest rates to remain unchanged. As a result, the key event will not be the decision itself but the Fed's guidance regarding future monetary policy.

A negative factor remains the lack of meaningful inflows into spot BTC ETFs. According to SoSoValue, net inflows over the past 24 hours totaled only $10 million, a relatively insignificant amount. While the recent streak of outflows has paused, there is still little evidence of fresh capital entering the market.

Another issue worth noting is that Binance, the world's largest cryptocurrency exchange, could lose its authorization to serve clients in the European Union as early as next month. According to two sources familiar with the matter, the company's licensing application is likely to be rejected.

Although developments like this do not typically have an immediate impact on Bitcoin's price, they continue to weigh on overall market sentiment and limit the flow of new capital into the sector.

Bitcoin faces renewed downside risks

The $70,000–$72,000 zone remains the key obstacle to a full recovery.

Bitcoin recently tested $67,000 but failed to establish itself above that level. For now, the move still appears to be driven primarily by short-term traders taking profits rather than by genuine buying demand.

Since the RSI (14) has exited oversold territory, the risk of another downward move has increased.

A decline toward the local support level at $64,000 is now expected. If this support breaks, the probability of a retest of $60,000 rises significantly.

From a broader perspective, Bitcoin remains in a downtrend, while trading volumes do not yet confirm a trend reversal. Historically, volumes tend to increase during consolidation phases preceding major recoveries, which is not currently the case.

The market still awaits a confirmed bottom

Following the de-escalation of tensions between the United States and Iran, Bitcoin managed to recover a portion of its recent losses. However, market data still does not indicate the emergence of sustained demand.

Capital flows into spot BTC ETFs have effectively stalled and remain close to zero.

Meanwhile, Wintermute, one of the world's largest cryptocurrency market makers, has warned that the formation of a "structural bottom" at current price levels has not yet been confirmed.

Until stronger institutional demand emerges and market participants receive greater clarity from the Federal Reserve, downside risks are likely to remain elevated.

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