Bitcoin fell after the Federal Reserve kept interest rates unchanged at 3.50% to 3.75%, as traders focused less on the hold itself and more on the policy message that followed. Before the decision, Bitcoin was trading near $66,000. It later dropped to $64,800, a daily decline of a little more than 1%. Even so, the asset was still up roughly 5% over the past week.
The Fed said economic activity continues to expand at a strong pace despite elevated uncertainty. At the same time, it warned that conflict in the Middle East could create supply shocks, especially in energy and selected sectors. The central bank also repeated its commitment to bringing inflation back to its 2% target, saying that the committee will ensure price stability.
Updated projections shift the rate outlook
The sharper market reaction came from the Fed’s quarterly projections. The median forecast for the federal funds rate at year-end moved up to 3.8% from 3.4% in March. That change suggested policymakers are stepping back from earlier expectations for rate cuts this year. For markets, the message was clear: a near-term easing cycle now looks less likely.
The labor market remained part of that reading. The Fed noted that job conditions across the US are still stable, and recent strong employment data had already weighed on risk assets such as Bitcoin. Traders read that combination as a sign that inflation remains sticky enough to keep the central bank cautious.
Middle East tensions add pressure through energy and inflation
Macro risk is not coming from monetary policy alone. The report pointed to rising geopolitical tension in the Middle East, with conflict involving the US-Israel bloc and Iran adding pressure to energy supplies. Oil prices and inflation expectations have drawn closer scrutiny as a result. At the same time, statements from both sides showing some willingness to negotiate helped prevent an even sharper deterioration in risk sentiment.
CME FedWatch data showed investors now assign an 18% chance of a rate increase at the Fed’s July meeting. The steady-rate decision had been widely expected, but the statement and forecasts changed how traders priced the next step. That repricing weakened risk appetite across global markets.
Ethereum and Solana held stronger weekly gains
While Bitcoin moved lower after the announcement, other major tokens still showed firmer weekly momentum. Ethereum rose 7.6% over the past seven days to $1,763, and Solana gained 13% to reach $73. The moves pointed to uneven performance inside crypto even as macro pressure increased.
The selloff was not limited to digital assets. Stocks and precious metals also declined after the Fed decision. From here, markets are likely to stay focused on inflation data, labor market releases, and future Fed communication, all of which are shaping the path for both traditional assets and cryptocurrencies.