Bitcoin is sliding into one of its cheapest valuation zones in four years. According to Checkonchain data, BTC has approached the 200-week moving average—a key trendline for long-term holders—placing the asset in the bottom 10% of historical valuation. This zone has typically appeared only during the tail ends of past bear markets.
This week, Bitcoin briefly broke below the $60,000 mark for the first time in 2024. On Thursday, BTC traded at $62,623, up 1.9% on the day but still down on the week. The Crypto Fear & Greed Index plummeted to 9, deep into "extreme fear" territory, falling sharply from 11 last week and 48 a month ago.
Inflation Heats Up: US CPI Hits Fastest Pace in Three Years
US consumer prices rose 0.5% month-over-month in May, pushing the annual rate to 4.2%—the fastest since early 2023. The Bureau of Labor Statistics attributed the spike to rising energy costs driven by the Iran conflict. Core CPI, excluding food and energy, edged up 0.2% monthly, slightly below economist expectations—the only easing signal in the report. Overall inflation reduces the scope for rate cuts, further diminishing the appeal of non-yielding assets like Bitcoin.
Headwinds Mount: Rate Hikes, Equity Declines, ETF Outflows
The European Central Bank is expected to deliver its first rate hike on Thursday, the first since September 2023, with bond traders already pricing in global tightening. The MSCI World Index fell to its lowest since May 5, while Asian equities dropped 0.8%. Brent crude rose 1.8% to around $95 per barrel. In Bitcoin ETFs, BlackRock's IBIT and Fidelity's FBTC continue to dominate new inflows, marginalizing smaller funds. Although Bitcoin has lost about 29% year-to-date, IBIT and FBTC have acted as stabilizers, drawing capital even as competitors face redemptions.
Yves Renno, head of trading at global crypto payments platform Wirex, noted: "Hopes for US regulatory clarity are fading again. Polymarket odds for a 'Clear Act' passing in 2026 have dropped from 62% to 48%."
Final Battle Before FOMC: June 16-17 Sets the Tone
Renno said all eyes are now on the June 16-17 FOMC meeting. The tone of new Fed Chair Warsh will determine whether Bitcoin rebounds to the $68,000–$72,000 range or decisively breaks below $60,000. Checkonchain cautioned that bottoms are a process, not a single point: first comes capitulation, then months of sideways grinding that slowly erodes remaining holders. The current Fear Index of 9 suggests price-sensitive sellers have already exited, but the patience test of the sideways phase is just beginning.
Thursday's rally was broad but shallow: Ethereum rose 1.4% to $1,651, SOL climbed 0.9% to $65, and BNB gained 1.3% to $595. XRP lagged, falling 0.3% to $1.12. Over the past seven days, Ethereum and XRP suffered the largest losses at 6.5% and 7.5% respectively. Thursday's bounce only partially recouped weekly declines, failing to reverse the trend.