Bitcoin Slides Below US$63K Amid Hawkish Fed Signals and Rising Middle East Tensions

Bitcoin fell 2.8% to US$62,924.8, erasing this week's brief recovery and putting BTC on track for a 1.4% weekly decline. The cryptocurrency is now down roughly 28% year to date.

Fed signals weigh on sentiment

Market sentiment shifted after recent comments from Federal Reserve officials suggested interest rates could remain higher for longer. Although softer U.S. inflation data had briefly eased expectations of further tightening, Dallas Fed President Lorie Logan and Federal Reserve Governor Christopher Waller both indicated that additional rate increases could still be warranted if inflation remains persistent.

Federal Reserve Chair Kevin Warsh also reiterated the central bank's commitment to its 2% inflation target, without providing additional guidance on the expected policy path.

Geopolitical tensions remain elevated

Oil prices moved higher this week as military tensions between the United States and Iran intensified around the Strait of Hormuz. Iranian officials also warned that additional shipping routes in the Middle East could face disruption, increasing concerns over a broader regional conflict.

The combination has added to broader risk-off sentiment across financial markets, with cryptocurrencies among the assets experiencing increased volatility.

ETF flows reverse

According to SoSoValue, U.S. spot Bitcoin ETFs are on pace to record US$56.6 million in net outflows this week, reversing the previous week's US$197.4 million in inflows that had temporarily ended an eight-week streak of withdrawals.

Altcoins also declined

1. Ether: −4.7% to US$1,831.68
2. Solana: −3.6%
3. Cardano: −2.5%
4. BNB: −2.3%
5. XRP: −1.7% to US$1.0869
6. Dogecoin and $TRUMP: approximately −2% each

Market participants may continue to monitor developments surrounding U.S. monetary policy and geopolitical tensions, as both remain key sources of uncertainty heading into next week.