Bitcoin and major cryptocurrencies faced fresh headwinds after Kevin Warsh announced the Federal Reserve's decision to hold interest rates steady at his first Federal Open Market Committee (FOMC) meeting on Wednesday. Warsh deliberately avoided providing forward guidance, leaving markets to price in a potential rate hike by year-end. The lack of clarity on monetary policy, combined with a strengthening US dollar, creates a challenging environment for risk assets like Bitcoin, which typically depend on looser monetary policy to outperform.

Warsh Kills Forward Guidance

The FOMC statement under Warsh was notably brief, running barely half a page compared to the longer releases typical of his predecessor. Warsh did not add his own position to the dot plot. However, nine committee members already project a rate hike before year-end, and the CME FedWatch tool shows markets pricing only a 15% chance that rates stay flat through December. Analyst Benjamin Cowen argued that the pricing-in of a rate hike is itself a headwind, regardless of whether one actually happens. The two-year Treasury yield has been moving higher, repeating a pattern seen before rate hike cycles in the 1960s and late 1990s.

Dollar Strength and Inflation Risks

The US dollar is forming a massive base at current levels and showing signs of breaking out, a development that historically compresses crypto and risk asset prices. This pressure is compounded by inflation sitting above 2% for the entire period since 2021 with no clear path down. Warsh faces a situation where cutting rates would likely send long-end yields higher as bond vigilantes push back. "Inflation is a choice," Warsh said during the press conference, indicating he is less focused on decimal precision in inflation prints and more focused on the broader trajectory.

Market Implications for Bitcoin

Cowen noted that after a new Fed chair assumes the role, the S&P 500 often tests that chair with a correction. The back half of midterm years historically brings weakness, and June marks the beginning of that window. If the market throws Warsh that curveball, it tests whether he raises rates in the face of persistent inflation or runs policy hot, which would push long-end yields higher either way. Both paths are negative for Bitcoin in the near term. The only positive scenario requires oil prices staying down and inflation cooling enough to take rate hike odds off the table entirely.

Bitcoin is trading near $64,000, down 1.9% over 24 hours, while crypto-linked equities such as Galaxy Digital and BitMine Immersion Technologies have surged into top-tier momentum zones, outperforming the underlying token. The world's largest cryptocurrency remains nearly 49% below its all-time high of $126,198.07, even as specific stocks demonstrate significant relative strength.

Crypto Stocks Outrun Bitcoin

According to Benzinga Edge Stock Rankings, BitMine Immersion Technologies posted a week-on-week jump in its momentum score from 80.29 to 91.08. The stock was down 42.17% year-to-date and 20.99% over the month, but it gained 225.73% over the last year.

Galaxy Digital's momentum score rose from 86.71 to 90.87, despite having a poor growth score. The stock was 47.76% higher year-to-date, 11.58% over the month, and 78.69% over the year. Robinhood Markets, another crypto-adjacent stock tied to retail trading activity, showed strength with a momentum score of 75.60, rising from a mere 20.55 score. It maintained a strong price trend in the short and medium terms but a weak trend in the long term. The stock was down 6.98% year-to-date, but up 36.38% and 40.36% over the month and the year, respectively.

Bitcoin Stays Under Pressure

The divergence comes as crypto markets remain fragile following the Federal Reserve's latest policy decision and the U.S.-Iran peace agreement. Bitcoin recently slipped from above $66,000 to near $64,000, while Ethereum, XRP, Solana, and Dogecoin also traded lower. Crypto selling persisted even as stock futures rallied after President Donald Trump signed the Iran "Memorandum of Understanding." According to Santiment, the Fed decision became a classic "buy the rumor, sell the news" moment, with investors shifting attention "from what was expected to what comes next."

Analysts See Fragile Recovery

CryptoQuant said Bitcoin's short-term holder 'Spent Output Profit Ratio' has not yet broken into panic territory. "The current structure suggests a fragile recovery phase rather than full capitulation; a reclaim of 1.0 would confirm improving short-term sentiment, while a renewed drop below 0.95 would signal rising panic risk," CryptoQuant said. Meanwhile, Anthony Scaramucci remained bullish on Bitcoin's longer-term setup, saying, "I think Bitcoin starts to rally late in the 4th quarter of 2026 into early 2027."