Ahead of the highly anticipated Federal Open Market Committee (FOMC) interest rate decision on June 18, 2026, the narrative surrounding Bitcoin's price cycle has undergone a marked shift. Since December 2025, bulls have alternated between calling for a new all-time high (ATH) and now characterizing the current drawdown as a typical 50% mid-cycle correction. Trader TedPillows questioned how long it will take for bulls to admit they are wrong, emphasizing the importance of Kevin Warsh’s speech and any hawkish or dovish signals that could influence risk assets like Bitcoin.
Adding to the caution, market analyst Omkar Godbole pointed to a critical signal from the bond market. The spread between U.S. 10-year and 2-year Treasury yields has narrowed to just 28 basis points, the lowest since April 2025. According to Skanda Amarnath, managing director of policy research firm EmployAmerica, this flattening of the yield curve is the clearest market signal yet that the Fed will adopt a more hawkish stance. Initially, markets had priced in rate cuts earlier in the year, causing the curve to steepen, but that trend reversed amid the U.S.-Iran conflict and persistent inflation fears. A more hawkish Fed implies longer periods of elevated interest rates, which can exert downward pressure on risky assets like Bitcoin.
Godbole warned that even if the Fed keeps rates unchanged this month, rising expectations of a future hike could make it harder for a Bitcoin bull market to restart. In line with the four-year halving cycle theory, the analyst suggests the hawkish bond market could point to a cycle bottom around October 2026.
