Bitcoin has dipped below its 200-week simple moving average twice in the past two weeks — a level currently sitting near $62,358 — before closing each week back above it. Kraken Chief Economist Thomas Perfumo told CoinDesk those rare tests of the 200-week floor have historically been among the most favorable entry points in bitcoin's history: median one-year returns of 113%, median two-year returns of 313%, a median time to break even of just two days, and a median maximum drawdown of only 9% over the following year. Since mid-2017, weekly closes below the 200-week SMA have occurred on only about 10% of trading days — making the current zone genuinely unusual. The caveat Perfumo is careful to include: past performance does not guarantee future results, and the macro backdrop today — a hawkish Fed, a rising dollar, rates expected to stay higher through 2028 — is more challenging than in prior cycle bottoms. Bitcoin is trading near $63,900, just above the average. The question the data is asking: is this a generational entry or the beginning of a break below?
The U.S. Treasury yield curve has flattened sharply, with the 10-year/2-year spread at its tightest since April 2025 — a configuration that historically signals the Fed is committed to a more restrictive stance for longer. The Fed's latest projections show policy rates staying elevated through 2028, making fixed-income assets increasingly attractive relative to non-yielding risk assets like bitcoin. Warsh's first FOMC meeting struck a hawkish tone even as Trump signed the Iran peace deal, which would normally be a tailwind for risk assets. The bond market is doing something specific: it's pricing in the Fed being more worried about a second inflation wave than it is about growth, and that's a direct headwind for crypto. The four-year halving cycle thesis — pointing to a potential bottom around October — remains intact in the long-term view, but the near-term bond signal is telling bitcoin bulls that patience, not positioning, is the current edge.
Combined exchange spot volumes fell 3.45% in May to $4.41 trillion — the lowest monthly total since November 2023 and the fourth consecutive monthly decline. Capital is rotating out of crypto spot markets and into AI stocks, IPO allocations, and traditional fixed income. One notable counter-trend: RWA perpetual futures volumes rose 10.4% against the broader decline, hitting a new all-time high — underlining that institutional-grade onchain products are finding demand even as retail activity contracts.
Bitcoin’s nemesis — the Dollar Index — is on the verge of a major breakout. Warsh’s first FOMC decision held rates as expected, but his press conference was more hawkish than the market had priced, signalling the Fed is more concerned about inflation than growth. Stocks rose on the Iran deal signing. Bitcoin and ether fell. BTC and ETH ETFs lost $111 million combined as rate cut hopes died. The DXY now sits at a technical inflection point: if it breaks higher, BTC faces a mechanical headwind that has reliably capped rallies all year. Marex analysts call today’s positioning “defensive and thin.”
CoinDesk Disclosure: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets.
L1.co Disclosure: This material is for informational purposes only, and the content contained herein should not be considered investment advice or a solicitation, offer, or recommendation to sell or buy any asset, strategy, or product. Investing in digital assets involves a high degree of risk, including the loss of principal.
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Bitcoin’s nemesis — the Dollar Index — is on the verge of a major breakout.
Warsh held rates as expected but delivered a hawkish press conference — signalling the Fed is more worried about inflation than growth — and the Dollar Index responded by pushing toward key resistance. The DXY’s near-perfect inverse correlation with BTC has been a defining feature of this bear market: earlier this year the 30-day correlation ran at −0.90, meaning 81% of bitcoin’s short-term price moves were statistically linked to shifts in the greenback. A DXY breakout would mechanically cap any BTC recovery while that correlation holds. The outlook for the dollar is supported by three structural tailwinds now: the hawkish Fed, oil prices still elevated on residual Hormuz constraints even post-ceasefire signing, and a global repricing of the rate path as the BOJ also tightened last week. Stocks rose on the formal Iran deal — the ceasefire was signed yesterday — but crypto did not participate. The divergence between equities and crypto on a risk-on day is itself a warning sign about near-term positioning.
Bitcoin and ether ETFs lost $111 million combined as rate cut hopes died.
U.S. spot bitcoin and ether ETFs lost a combined $111 million on Tuesday as Warsh’s press conference killed near-term rate cut expectations. Bitcoin ETFs bled the majority of the losses; ether ETFs also recorded outflows for the second consecutive session. The hawkish Fed tone hit crypto harder than equities because crypto’s recent recovery thesis has been premised partly on the expectation that the Fed would eventually blink — either on inflation or on growth. Warsh made clear he sees neither reason to blink now. Fed funds futures now price zero cuts in 2026 and an 80% probability of a 25bps hike by December. That repricing means every macro-driven crypto recovery attempt faces a structural interest-rate headwind that was not fully in the market 48 hours ago. The Iran ceasefire formal signing provided no lasting boost; the market had already priced the deal, and the hawkish Fed more than offset the geopolitical relief.
Crypto market positioning is “defensive and thin” after the Fed, Marex analysts say.
Marex analysts describe Wednesday’s crypto market as “defensive and thin” — a combination they flag as inherently volatile: thin liquidity amplifies moves in both directions while defensive positioning means any macro surprise could trigger a sharp unwind in either direction. Oil has risen for five consecutive sessions, keeping the inflation channel open despite the ceasefire. Hormuz remains effectively constrained even post-signing, with full tanker traffic normalization expected to take weeks rather than days. The Warsh Fed’s hawkish stance removes the near-term catalyst that macro-driven bitcoin bulls needed to push through $68,000. Marex’s base case is that the market remains range-bound between $60,000 and $68,000 through the summer, with a breakout in either direction requiring a change in one of three variables: the Fed’s inflation narrative, Hormuz traffic normalization, or a resumption of ETF inflows. None of those three are currently trending in the right direction.
CoinDesk Disclosure: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets.
L1.co Disclosure: This material is for informational purposes only, and the content contained herein should not be considered investment advice or a solicitation, offer, or recommendation to sell or buy any asset, strategy, or product. Investing in digital assets involves a high degree of risk, including the loss of principal.
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