Bitcoin is fighting to hold the $65,000 level as traders brace for this week’s Federal Reserve interest rate decision amid a mixed backdrop of rising bond yields, heavy ETF outflows, and easing geopolitical tensions. After dipping below $64,000 earlier in the month, the largest cryptocurrency posted a 1% gain over the past 24 hours, trading between roughly $64,870 and $65,653. The rebound extends gains of about 2% in the past week and more than 8% over 30 days, yet BTC remains down roughly 25% from its 2025 record high above $126,000.
Easing fears over a potential US-Iran conflict helped lift sentiment across risk assets. Oil prices dropped around 5%, lowering inflation concerns and encouraging flows back into higher-risk markets, including crypto. However, the primary focus has now shifted squarely onto monetary policy. The Federal Open Market Committee is widely expected to leave rates unchanged at its upcoming meeting, but investors are parsing every signal for clues on the future path. CME FedWatch data shows markets anticipate a possible 25-basis-point increase in September and another hike before the end of 2026.
The yield on two-year US Treasury notes has climbed to 4.31%, well above the Fed’s target range. According to Mosaic Asset Company, this is adding pressure to risk assets and indicating that rates could remain restrictive for longer. The two-year yield is a closely watched barometer of Fed policy expectations, and its latest move suggests traders see little relief ahead.
Bitcoin’s technical picture reflects the uncertainty. Market analyst Wealthmanager emphasized the importance of the $64,000 level, warning that a decisive break below it could invalidate Bitcoin’s lower-time-frame bullish structure. Analyst Rekt Capital noted similarities to the 2022 bear-market structure, with BTC facing resistance near the 50-month exponential moving average around $65,950. A sustained move above that mark would weaken the bearish comparison, but a confirmed drop below $64,000 could increase the risk of a deeper correction.
Despite rising yields, the relationship with Bitcoin is not always linear. In May 2025, the 30-year Treasury yield surged to 5.15% even as Bitcoin hit a new all-time high, driven by demand for alternative assets amid inflation and fiscal policy concerns. The current weakness may therefore reflect portfolio rebalancing and broader uncertainty rather than pure rate-hike fears. 10x Research previously cautioned that even an initial Fed rate cut could temporarily pressure Bitcoin if it is interpreted as confirming economic weakness.
Institutional flows are also flashing caution. After seven consecutive sessions of net inflows, US spot Bitcoin ETFs experienced more than $465 million in combined net outflows over two trading sessions, according to Coinglass. That suggests some large investors have reduced exposure ahead of the Fed decision. Even with those outflows, Bitcoin has managed to hover near $65,000, indicating that broader demand is absorbing selling pressure. The market now awaits Fed Chair Kevin Warsh’s comments on inflation and the economy, which could set the near-term direction for both equities and digital assets.
