TradingKey – The Federal Reserve’s hawkish signals trigger a major shakeup in the crypto market, with Bitcoin potentially testing the $60,000 mark again in the short term.
On Thursday (June 18), the Fed’s growing hawkishness triggered a collective plunge in global risk assets. The three major U.S. stock indices all fell, and the cryptocurrency market plummeted by 2.6%. Among them, Bitcoin ( BTC) fell nearly 3%, breaking below the $64,000 mark; Ethereum ( ETH) dropped nearly 4%, falling below $1,800; Ripple ( XRP ), Solana ( SOL ), and Binance Coin ( BNB) all declined by 3% to 5%.
The interest rate decision announced by the Federal Reserve on June 17 showed that it held rates steady for the seventh consecutive meeting, keeping the benchmark interest rate unchanged at 3.50%–3.75%, which was in line with market expectations. However, the Fed’s hawkish shift has put immense pressure on the crypto market. Among the 19 committee members, 9 officials expect at least one more rate hike by the end of 2026, a stark contrast to the projections in March of this year, when no officials anticipated any rate hikes in 2026.
Most notably, Warsh directly shattered the Fed’s traditional 14-year communication mechanism by abruptly abolishing forward guidance without warning and leading the boycott of the dot plot, becoming the first Fed Chair to refuse to submit personal interest rate projections (the dot plot). Warsh bluntly stated that forward guidance is not suited to the current economic environment, explicitly declaring, “I cannot give you any forward guidance on what we are going to do next.”
The hawkish dot plot combined with a “blind box” policy devoid of forward guidance stimulated a collective rise in U.S. Treasury yields (with the 2-year Treasury yield climbing to around 4.14%) and a short-term strengthening of the U.S. dollar, directly siphoning liquidity from non-U.S. assets, gold, and Bitcoin. Furthermore, Warsh directly cut off market expectations of “turning the tap back on and returning to a rate-cut path” in the second half of the year; the statement became extremely brief, plummeting from the previous 340 words to about 130 words, offering no further comfort to the market.
The Fed’s hawkish signals could potentially end Bitcoin’s recent rally. From technical charts and on-chain data, $60,000 to $62,000 is currently a highly critical high-volume turnover zone and a key line of defense for leveraged long positions. If Bitcoin can stabilize effectively here, as the market digests the Fed’s hawkish sentiment, it could trigger short covering and lead to a further challenge of the $70,000 resistance level.
Bitcoin price chart, Source: TradingView
