Bitcoin Buffeted by Oil Shock Ahead of the Fed Decision

Bitcoin hovered around $64,000 as U.S.-Iran tensions sparked an oil price surge that added fresh pressure on markets.

Oil Surge Sends Bitcoin Tumbling

■WTI and Brent crude jumped 7.6% and 5.4%, respectively.

■The spike threatens to lift Consumer Price Index (CPI) expectations, complicating forecasts for interest‑rate moves.

■BTC/USD stalled at the Wall Street open after hitting an 11‑day low of $62,700.

Fed Decision Divides the Market

■CME Group FedWatch Tool shows a 66.3% probability the current 3.5‑3.75% target rate will stay, versus a 33.7% chance of a 0.25% hike.

■Chair Kevin Warsh is expected to give fewer forward‑guidance cues than his predecessor, heightening uncertainty.

■The Kobeissi Letter notes this split as “the most divided expectations in recent history.”

Liquidity and Volume Warning Signs

■CoinGlass data highlights potential liquidation clusters around $63,500 and $64,900.

■K33 Research reports spot‑market volume at $2.2 billion, the lowest level since July 2023.

■CME open interest remains near multi‑year lows, while perpetual futures hover around 300,000 BTC.

Investor Sentiment and ETF Outflows

■Retail interest has been declining since the October 2025 all‑time high.

■Bitcoin ETFs continue a net outflow streak, while AI stocks become the new magnet for capital.

■The Asia chip‑stock crash spilled over to Wall Street, dampening risk appetite.

Markets are caught between an oil‑driven inflation push and a cautious Fed stance. Bitcoin’s price range is constrained by liquidity pressure and muted trading volumes, amplifying short‑term volatility risk. Institutional outflows from ETFs and a rotation toward AI equities erode crypto’s appeal, leaving its long‑term store‑of‑value narrative in a cloud of uncertainty. – Deniz Arel, Director of Crypto Regulation and Compliance