Fed Comments Weigh Heavily on Cryptocurrency Market Confidence

The cryptocurrency market remains cautious due to recent Federal Reserve comments.

The US central bank's decision to keep interest rates unchanged at 3.75% was accompanied by comments that inflation has remained elevated for over five years, prompting concerns of a more aggressive stance from the Fed in the coming months.

This shift is reflected in the CMEGROUP probability table, where there is now a 51% chance of a rate hike to 4.00% at the September meeting, up from 3.4% projected in March.

The increased interest rates and expectations of a more restrictive Fed have led to a decrease in market liquidity, making it difficult for cryptocurrencies to sustain consistent demand.

In fact, Bitcoin ETF flows have shown net outflows over the past week, with outflows exceeding $100 million on June 17, indicating that caution was already present before the Fed decision and continued after the announcement.