Winter Was Cute: Bitcoin Bounces Off $59K, Short Sellers Get Frostbite 🥶

Bitcoin stabilized near $64,000 on Thursday, down roughly 1% over 24 hours, as traders parsed a hawkish debut from new Federal Reserve Chair Kevin Warsh against signals that the market may have carved out a bottom. The leading cryptocurrency held a market capitalization near $1.29 trillion and remained up 2% over the past week. Ethereum and Solana eased to about $1,740 and $72, respectively. The drift lower extended a pullback that began Wednesday, when the Federal Reserve held its benchmark federal funds rate steady at 3.5%–3.75% but raised its year-end projection, indicating it is done cutting and reviving bets on a possible July hike. That pivot cooled a relief rally that had pushed Bitcoin to $67,000 on de-escalation of the U.S.-Iran conflict.

The selling stemmed more from the Fed's tone than its decision. Daniela Hathorn, senior market analyst at Capital.com, said Bitcoin slipped less on the priced-in rate hold than on messaging that reinforced the Fed's caution about declaring victory over inflation. "Bitcoin has benefited in recent years from expectations of easier monetary policy, so any indication that rates could stay elevated for longer tends to weigh on sentiment," she said, adding that the reaction suggests investors are "reassessing the likelihood and timing of future rate cuts" rather than the policy decision itself. Stephen Wundke, strategy and revenue director at Algoz Technologies, said the week's brief rebound on peace-deal news faded once Warsh's near-hawkish tone left traders bracing for "another rate rise left in this cycle." Gerry O'Shea, head of global market insights at Hashdex, expects Bitcoin to "continue to trade in the $60,000-70,000 range" in the weeks ahead absent a major catalyst, naming the CLARITY Act or further Iran de-escalation as potential triggers.

The recovery attempt followed a sharp reversal in geopolitical risk. Bitcoin climbed to $65,480 on June 14 after the United States and Iran signed the "Islamabad declaration," ending more than 100 days of military conflict, and the US naval blockade on the Strait of Hormuz was lifted. Roughly 20% of the world's oil supply moves through that waterway. Within 24 hours, around $246 million in crypto short positions were liquidated as traders repositioned around a new rate outlook. Standard Chartered global head of digital asset research Geoff Kendrick wrote on Friday that Bitcoin's drop to nearly $59,000 likely marked the nadir of crypto winter, a 53% drawdown from its October 2025 peak of $126,000. "I think we have now seen the low in crypto asset prices," he wrote. "Winter is over." He added that SpaceX's $1.75 trillion IPO on Friday serves as a direct stress test for crypto liquidity, noting that pre-IPO perpetual contracts on SpaceX (SPCX) on Hyperliquid have amassed over $240 million in open interest and $220 million in 24-hour volume, making it the eighth-largest asset on the platform.

Sentiment around the recovery was mixed. Galaxy CEO Michael Novogratz said he never believed Bitcoin should trade on a four-year cycle, and argued that as BTC matures, that framework may no longer apply. He noted that Bitcoin has traded 4x above its 2022 lows of around $15,000, that BTC sits above Michael Saylor's predicted low of $45,000, and that some investors who went long at $8,000 and are targeting $300,000 to $400,000 have not sold at $126,000. He added that volumes are down 40% and that the AI bubble was becoming a concern. AMBCrypto reported that spot Bitcoin ETF flows remained bearish for five straight weeks, while Glassnode's weekly report showed spot volume down 40.4% over the past week, futures open interest down 3%, active addresses down 6.3% and entity-adjusted transfer volume down 38.8%. Bitcoin strategist Axel Adler Jr. wrote that the bounce from $60,000 was driven by returning buyers rather than a short squeeze, with taker values above 1.0 on eight of the previous 10 trading days and a positive funding rate.

Headline inflation data added a counterweight. The April 2026 consumer price index showed headline inflation up 0.5% on the month and 4.2% over the year, the fastest annual pace since April 2023, with energy climbing 3.9% on the month and accounting for more than 60% of the increase as oil rose on the Iran conflict. Core inflation, which strips out food and energy, rose 0.2% on the month, below the 0.3% forecast, and 2.9% over the year. Bitcoin rose about 1.9% over 24 hours to roughly $62,600 on the report, leading the majors. Looking back, Standard Chartered issued a $100,000 price target for Bitcoin in February, Bitcoin was recently changing hands above $64,000 for a 5% weekly gain, and the total crypto market cap edged down to $2.277 trillion from $2.29 trillion. U.S. spot Bitcoin ETFs have shed just under $4.6 billion since mid-May, with approximately $5 billion in net outflows over the same period, while the Crypto Fear & Greed Index bottomed at 12 last week and Bitcoin remains roughly 17% lower over the past 30 days after bouncing off a low near $62,500.